Business Finance

Debt financing is a form of external financing where a company borrows money from lenders, such as banks or financial institutions.

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• FALSE

Equity financing is a form of external financing where a company sells shares of ownership in the company to investors.

• TRUE

• FALSE

Debt financing typically involves lower interest rates compared to equity financing.

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• FALSE

Cash flow management is primarily concerned with maintaining a high level of cash reserves, even if it means sacrificing growth opportunities

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• FALSE

Effective cash flow management is crucial for businesses to ensure they have sufficient funds to meet their short-ter+m and long-term obligations.

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• FALSE

Businesses should aim to have a zero-inventory policy, where they only receive inventory as needed to fulfill orders, to minimize holding costs.

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• FALSE

Inventory management involves tracking inventory levels, identifying slow-moving and obsolete items, and implementing strategies to reduce carrying costs

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• FALSE

Businesses should prioritize granting extended credit terms to customers to maximize sales and revenue.

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• FALSE

Accounts receivable management is solely concerned with collecting payments from customers and does not consider other aspects of the financial cycle, such as inventory management and accounts payable

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• FALSE

Suppliers Credit refers to the extension of the payment due date by suppliers.

• TRUE

• FALSE