Exam 9: Finance: Acquiring and Using Funds to Maximize Value

Juxiplex, an electronics company, introduced a new range of smart phones. It bought the required raw materials from Gunplet Inc. without making payment at the time of purchase. Instead, Gunplet Inc. allowed Juxiplex to pay within fifteen days from the time of purchase. Which of the following short-term financing options was used by Juxiplex in the given scenario?

Rudolf and Martin, a finance management company, offers funds to corporations that require a permanent source of funding. However, it required the company to make fixed payments on a regular schedule to ensure that the amount borrowed and interest are repaid. Which of the following sources of long-term funds is being offered by Rudolf and Martin in the given scenario?

_____ forecasts the types and amounts of assets a firm will need to implement its future plans and help financial managers determine the amount of additional financing the firm must arrange in order to acquire those assets.

Gotwing Inc., a multinational company, issues promissory notes to big corporations. As the company has strong credit ratings, it easily finds buyers without having to offer a substantial discount for its debt. Which of the following short-term financing options is being used by Gotwing Inc. in the given scenario?

Wild Trails Inc., an adventure resort in Texas, has 500 shares of outstanding common stock and has not issued any preferred stock. Its net income is $27,500. Wild Trails Inc.'s earnings per share is _____.

A disadvantage of debt financing is that creditors often impose covenants on the borrower.

David needs to acquire financial capital to purchase a printing press for his business. David can either acquire the financial capital for the press by borrowing money from a bank or by purchasing the press on credit from his supplier.

Commercial paper, which is sometimes issued for as little as two days, can be issued for up to 270 days.

Newot Texin, a pharmaceutical company, introduces a new pain relieving drug in the market. It borrows $1 million from Esterotia, a private bank, to market the drug. In return, Esterotia allows Newot Texin to return the full amount with interest in fixed amounts of $200,000 every six months. Which of the following sources of long-term funds is being used by Newot Texin in the given scenario?

Which of the following statements is true of current ratio?