Exam 11: Debt and Other Forms of Financing

Typically, a company can borrow what percent of its accounts receivable's face value if it has a good credit rating and its customers have excellent credit ratings.

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(Multiple Choice)

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Question 1

Correct Answer:

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Is it a mistake for a company to offer credit terms to its customers for early payment?

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(Essay)

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Question 2

Correct Answer:

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$\bullet$ This depends on whether giving a cash discount speeds up collections, and whether the opportunity cost of the funds that would otherwise have been locked up in receivables justifies the reduction in net sales revenues.

Techniques for forecasting future sales are limited to methods that use external or economic information.

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(True/False)

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Question 3

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False

Why do entrepreneurs usually want to keep inventory levels as low as possible? What are the challenges facing entrepreneurs who want to reduce their inventory levels?

(Essay)

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Question 4

What economic factor concerning the entrepreneur's product is the most significant for the company's credit policy?

(Multiple Choice)

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Question 5

Banks and finance companies usually lend ______, in writing a floating lien.

(Multiple Choice)

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Question 6

When choosing to use internal funds as means to support growth, discuss to what ends this growth must be ultimately focused on (in terms of financing considerations).

(Essay)

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Question 7

An entrepreneur's inventory is an asset that legally cannot serve as collateral for a loan.

(True/False)

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Question 8

From a microeconomic perspective, a company operating below its optimal output should always offer generous credit terms in order to stimulate demand.

(True/False)

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Question 9

An entrepreneur may only cash in his accounts receivable by going to a finance company for a loan.

(True/False)

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Question 10

The relative proportions of cash sales and credit sales make an important difference to which of the following?

(Multiple Choice)

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Question 11

Which of the following assets represent the most important current asset of many manufacturing companies?

(Multiple Choice)

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Question 12

List two examples of Routine Provisions.

(Essay)

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Question 13

What are the three categories of restrictive covenants mentioned in the chapter, in relation to loan agreements?

(Essay)

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Question 14

The business operating cycle for a traditional manufacturer begins with the purchase of raw materials and ends with collections from the customer.

(True/False)

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Question 15

The two major determinants of the credit decision are the character of the creditor firm and the capacity of the debtor company to repay the loan.

(True/False)

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Question 16

What actions towards the ventures' cash collection cycle, should an entrepreneur take before seeking ways to prematurely extract short term cash from his/her operating assets?

(Essay)

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Question 17

When a borrower instructs its customers to pay their invoices directly to the lender, the arrangement is called, "Pledging with notification."

(True/False)

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Question 18

The vast majority of organizations experience a gap between the time when they have to pay suppliers and when they receive payment from customers.This gap is known as the cost cycle.

(True/False)

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Question 19

Which of the following is not suitable for using field warehousing?

(Multiple Choice)

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Question 20

Showing 1 - 20 of 69

Typically, a company can borrow what percent of its accounts receivable's face value if it has a good credit rating and its customers have excellent credit ratings.

Is it a mistake for a company to offer credit terms to its customers for early payment?

Techniques for forecasting future sales are limited to methods that use external or economic information.

Why do entrepreneurs usually want to keep inventory levels as low as possible? What are the challenges facing entrepreneurs who want to reduce their inventory levels?

What economic factor concerning the entrepreneur's product is the most significant for the company's credit policy?

Banks and finance companies usually lend ______, in writing a floating lien.

When choosing to use internal funds as means to support growth, discuss to what ends this growth must be ultimately focused on (in terms of financing considerations).

An entrepreneur's inventory is an asset that legally cannot serve as collateral for a loan.

From a microeconomic perspective, a company operating below its optimal output should always offer generous credit terms in order to stimulate demand.

An entrepreneur may only cash in his accounts receivable by going to a finance company for a loan.

The relative proportions of cash sales and credit sales make an important difference to which of the following?

Which of the following assets represent the most important current asset of many manufacturing companies?

List two examples of Routine Provisions.

What are the three categories of restrictive covenants mentioned in the chapter, in relation to loan agreements?

The business operating cycle for a traditional manufacturer begins with the purchase of raw materials and ends with collections from the customer.

The two major determinants of the credit decision are the character of the creditor firm and the capacity of the debtor company to repay the loan.

What actions towards the ventures' cash collection cycle, should an entrepreneur take before seeking ways to prematurely extract short term cash from his/her operating assets?

When a borrower instructs its customers to pay their invoices directly to the lender, the arrangement is called, "Pledging with notification."

The vast majority of organizations experience a gap between the time when they have to pay suppliers and when they receive payment from customers.This gap is known as the cost cycle.

Which of the following is not suitable for using field warehousing?

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The Entrepreneurial Process

Opportunity Recognition, Shaping, and Reshaping

Understanding Your Business Model and Developing Your Strategy

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Building the Founding Team

The Business Planning Process

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Facing Entrepreneurial Ventures Worldwide

Raising Money for Starting and Growing Businesses

Legal and Tax Issues, Including Intellectual Property

Entrepreneurial Growth

Social Entrepreneurship: an Overview

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