Like many small businesses in the early stages, founder Jim Moon self-financed Moonworks. When the founder provides the primary funding for a small business, she or he is employing which form of financing?

a.Debt capital

b.Equity capital

c.Sales revenue

d.Proceeds from sales of assets

When Jim Moon wanted to buy his firm's building instead of renting it, to which of the following types of funding did he turn?

a.Debt capital

b.Equity capital

c.Retained earnings

d.Sales revenue

When Bank RI or any other bank assesses whether a business is creditworthy and capable of repaying a long- or short-term debt obligation, one of the first things they consider is the movement of money into and out of the firm, also known as

a.collateral.

b.sales revenue.

c.cash flow.

d.risk-return ratio.

Which of the following forms of debt financing is unlikely to be used by a firm the size of Moonworks?

a.Promissory note

b.Loans secured by inventory

c.Commercial paper

d.Trade credit

To help Moonworks expand and exploit opportunities it recognized, Bank RI granted a ______, which is a loan that is approved before the money is actually needed.

a.line of credit

b.trade credit

c.banker's acceptance

d.promissory note