Reference no: EM132986084
1.Net working capital is:
a. current assets less current liabilities less non-current liabilities
b. current assets less current liabilities
c. non-current assets less non-current liabilities
d. current assets less non-current liabilities
2.Cash flows OUT of an entity includes:
a. purchase of inventories
b. long-term loan funding
c. capital injections
d. sales of used or unwanted assets
3.Cash flows come into the entity from a number of sources, but does NOT include:
a. payment of taxes
b. cash sales
c. capital injections
d. short-term loans
4.For long-term funding purposes, most financial institutions offer:
a. Fixed-rate business loans only
b. A variety of loans, leases and advances
c. Advances and lease finance only
d. Only secured business loans
5.Cash flows out of an entity include:
a. purchase of labour, materials and other services
b. all options listed
c. purchase of inventories and payment of taxes
d. purchase of assets (fixed or intangible)
6.Which of these is not a characteristic of a variable-rate business loan?
a. Terms are available up to 25 years
b. The loans are available from most of the major financial institutions
c. Interest rates vary with changes in the market rate
d. The loans are generally unsecured
7.Which of the following is not a characteristic of debentures?
a. Debentures may be issued privately to large institutional investors
b. None of the options. All of the options are characteristics of debentures.
c. Debentures are secured
d. Debentures are issued to raise debt funds
8.A form of debt finance where funds can be obtained directly from the public rather than from financial institutions is:
a. lease finance
b. variable-rate business loans
c. debenture finance
d. fully drawn advances
9.A form of debt finance where funds can be obtained directly from the public rather than from financial institutions is:
a. variable-rate business loans
b. debenture finance
c. fully drawn advances
d. lease finance
10.Cash flows into an entity include:
a. credit sales, when accounts receivable eventually pay their accounts
b. all options listed
c. cash sales
d. sales of used or unwanted assets