Introduction to Credit - Source Funding There are many different sources of funding available for a company to be able to purchase CAPEX, or imvest in projects, each with pros, and cons. Which of the following is an advantage of using debt as a source of funding? Select all that apply. It doesn't have additional financial commitments The cost of debt is usually lower than the cost of equity It worrt dilute existing shareholder's value or change ownership percentage It's very liquid and always accepted Types \& Features of Credit - Interest There are two knds of interest, simple interest and compounding interest. If you borrow $5,000 with 4% interest compounded annually, how much total interest do you need to pay after 2 years? 408 404 400 412 When financing is of the "term" vanety, meaning it's not operating credit it can be structured as ether amortizing or as non-amortiang Which of the following loans is most likely to have the lowest total interest cost? Secured, amortizing loan. Unsecured nonimortizing loan Unsecured amortizigloan Secured non-amortizing loan