Question 3

Which one of the following expressions refers to the determination of the equal annual loan payments necessary to provide a lender with a specified interest return and repay the loan principal over a specified term?

1. Loan amortisation

2. Annual compounding

3. Present value technique

4. Future value annuity (annual)

Question 4

Identify from the following a more aggressive approach to financing working capital?

1. Financing permanent inventory build-up with long-term debt

2. Financing seasonal needs with short-term funds

3. Financing short-term needs with short-term funds

4. Financing some long-term needs with short-term funds