Sources of business finance part 1

Finance is needed under which of the following stage__________in a business?

• Promotion

• Incorporation

• Expansion

• All of the above

Under which of the following conditions the working capital requirement of a business will not be high.

• When it sells goods on credit

• When it sells goods in cash

• When it maintains high levels of inventory

• All of the above

Which of the following constitute a source of long term finance

• Equity shares

• Debentures

• Retained earnings

• All of the above

The long term source relate to the financial requirements of an enterprise for a period more than __________years.

• One

• Two

• Five

• Ten

Which of the following constitutes of source for medium term finance

• Borrowings from commercial banks

• Preference shares

• Retained earnings

• All of the above

A business can generate funds internally by______

• Accelerating collection of receivables

• Disposing of surplus inventories

• Ploughing back its profit

• All of the above

Which of the following is not an external source of finance?

• Issue of debentures

• Borrowing from commercial banks

• Accepting public deposits

• Retained earnings

Retain earnings does not involve any explicit cost in the form of

• Interest

• Dividend

• Floatation cost

• All of the above

Who among the following gets a priority over others in receiving a fixed rate of dividend out of the net profits of the company

• Equity shareholders

• Preference shareholders

• Debenture holders

• None of the above

Which of the following types of security bears fix rate of return

• Equity shares and preference shares

• Preference shares and debentures

• Equity shares and debentures

• None of the above