Exam 11: Debt and Other Forms of Financing

Which of the following is NOT a factor that influences the interest borrowers pay?

By paying bills more slowly, an entrepreneur will hurt his or her business.

A chattel mortgage is a loan secured by specific assets.

Building up inventory typically reduces cash levels.

Which of the following sources of short term funding offer the highest degree of security to the lender

Pledging means using accounts payable as collateral for a loan from a finance company or bank.

Short of demanding payments, what sales terms could an entrepreneur choose in order to collect cash more quickly?

Which of the following is NOT a way to use inventory as security for a loan?

Which of the following should be (if available)the entrepreneurs most economical choice for short term cash

A method of reducing overdue accounts and limiting bad debts is setting limits to the credit allowed on______.

Which of the following is NOT one of the Five Cs of credit?

One way for entrepreneurs to stretch their payables (to take longer to pay bills)is to take discounts.

The credit terms of "10/15, net 30" mean that the payment is due within 15 days, but if paid within 10 days, there is a net 30% discount.

Entrepreneurs requiring initial startup funding, generally seek capital from internal sources.

Banks prefer 90-day maturities on short term loans in order to

The ______ of receivables collection and payment of accounts payable are key determinants in whether a firm is cash rich or cash poor.

When using a public warehousing arrangement for a bank loan, the entrepreneur surrenders access to his/her inventory.

Corporate insolvency usually results when the firm fails to service its debt obligations on time.

Factoring with recourse implies that if a company does not pay its bill, the factor must absorb the loss.

To qualify for assistance from the Small Business Administration, the proceeds of an SBA-guaranteed loan must be used for what purpose?