Question
Kiran needs additional short-term financing for his robotics company, so he asks his suppliers if they could issue a discount if he pays his bills
Kiran needs additional short-term financing for his robotics company, so he asks his suppliers if they could issue a discount if he pays his bills early.
What type of financing resource is Kiran using?
- a) Factoring
- b) Trade credit
- c) Peer-to-peer lending
- d) Barter
What does the residual dividend model mean for investors?
- a) They should expect dividend distributions that are equal to net income.
- b) They should expect to consistently receive the same dividend.
- c) They should expect a level of uncertainty regarding their dividends.
- d) They should expect to always receive very small dividends.
Which of the following is a goal of working capital management?
- a) To minimize free working capital and maximize opportunity costs
- b) To ensure liquidity and increase cash holding costs
- c) To lengthen the span of time between payment of accounts payable and collection of accounts receivable
- d) To balance adequate cash flow against maximal returns
Which of the following investors would likely prefer a cash dividend over a stock dividend?
- a) Kylie is a high-income earner and prefers to avoid additional taxes this year.
- b) Enrique subscribes to the "bird in the hand" theory when it comes to dividends.
- c) Layton prefers when companies let him decide how to benefit from his dividends.
- d) Harriett is more focused on long-term outcomes than short-term ones when it comes to investing.
What is one advantage of NPV as a capital budget method?
- a) It is flexible, in the sense that the discount rate can be adjusted to account for factors like risk.
- b) Cash flows and the discount rate are easy to accurately determine.
- c) It is equally accurate whether cash flows are known or estimated.
- d) It accounts fully for opportunity costs.
Which of the following types of financing is typical for a business in its mature stage?
- a) Start-up venture capital
- b) Second-round venture capital
- c) Bank loans
- d) Equity
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started