Business Finance

An example of working capital is...

• pay electricity bills.
• pay machinery.
• pay rent cost.
• pay insurance.

What is NOT a source of Internal finance?

• Retained profit
• Sale of existing assets
• Issue of shares
• All are sources of Internal finance

They are considered owners of the business and have voting rights, entitled to dividends which depend on their share and earnings of the corporation. They are called _________.

• stockholder

• stakeholder

• employees

• investors

An amount of money that is paid back within an agreed amount of time, with interest

• Bank loan

• Angel investment

• Overdraft

• Retained profit

A short-term source of finance from a bank that usually is only used in an emergency/when needed

• Overdraft

• Loan

• Share capital

• Credit card

Which of the following statements about overdrafts is not true?

• Short term source of finance

• It's really a small, short term loan

• It's flexible, in that it can be used whenever it is needed

• Cheap - the interest rate is usually lower than that of a long-term bank loan

Case study: after years of success and growth, Shark Tank success story Lumibowl (a clip-on light that illuminates your toilet bowl so you 'hit your target' in dark of night!) is ready to grow extensively into other countries. It needs huge amounts of money in order to do so. Which source of finance would be a good fit?

• Raising share capital by transforming from a partnership to a public corporation

• Taking advantage of the agreed overdraft with the bank

• Retained profits of $80,000

• Crowdfunding

in which type of business finance are debentures included?

• long term source

• short term source

• medium term source

commercial banks do not provide loans in the form of

• overdraft

• term loans

• debentures

• cash credit

Funds required for purchasing current assets is an example of

• Fixed capital requirement

• Ploughing back of profits

• Working capital requirement

• NONE OF THE ABOVE