Exam 12: A Firm S Sources of Financing

Which financing source has the greatest advantage of speed?

A line of credit is the _____ amount of credit a bank will provide a borrower at any one time.

Commercial investors are sometimes called business angels.

The basic factors that determine how a firm is financed are restricted to the firm's past economic performance, the nature of its assets, and the personal preferences of owner(s) with respect to the marketing mix.

The type of financing Evangeline received from a business angel is known as:

Elyse wants to calculate her return on equity but has forgotten the formula.  You tell her that return on equity equals

Small firms frequently run into problems when:

The main advantage of using credit cards for financing is the relatively low interest rate compared to bank loans.

Barry needs financing to start his inner-city venture.  His goal is to provide part-time employment for at-risk youths to keep them off the streets and engaged in learning marketable skills.  Barry may find some assistance from:

Discuss reasons a business would lease as opposed to purchasing equipment.

When a stock sale is restricted to private placement, an entrepreneur can avoid many of the demanding requirements of the securities laws.

Business angels, as opposed to venture capitalists, provide

Elena plans to open a non-profit child-care center in her depressed neighborhood.  She may qualify for an SBA loan program that provides loans of up to $50,000 known as the:

To determine how well her business is doing, Darlene should monitor the return on her investment (equity) because it is a better measure of performance than

Janice loves to cook and go backpacking, and she had an idea for a backpacking cookbook that would combine ultralight ingredients into interesting and appetizing meals. However, she needs the money to research and test the recipes as well as cover printing and marketing expenses. How could Janice use the different crowdfunding options, donations, rewards, pre-purchase, or equity-based, to finance her cookbook?

Allie is starting  a purse business and has been approached by Renee, a business angel, about investing in the company.  Discuss items Allie should consider before going into business with Renee.

Guaranty loans are

A loan covenant is very likely to require

The private sale of a firm's common stock is regulated by the Securities and Exchange Commission.

LIBOR is _____ the prime rate.