Finance Quiz

Which of the following is an example of internal finance?

• Bank loan

• Retained profit

• Venture capital

• Overdraft

What is a main disadvantage of equity finance?

• High interest payments

• Dilution of ownership

• Short repayment period

• Requires collateral

Which source of finance is most likely to require giving up some control of your company?

• Bank overdraft

• Government grant

• Venture capital

• Leasing

What does ‘collateral’ mean in the context of raising finance?

• A share of company profits

• An asset pledged as security for a loan

• A government subsidy

• A financial forecast

Which of the following is NOT usually considered a source of external finance?

• Factoring

• Retained earnings

• Bonds

• Bank loan

In the Unit 9 case study, what is the main goal of the film production company?

• To buy new equipment

• To secure funding for a new film

• To hire more staff

• To expand into new markets

What is a key advantage of using retained profits as a source of finance?

• No interest or repayments required

• Quick access to large sums

• No risk to personal assets

• Increases company control

What is the main risk for investors providing venture capital?

• Fixed repayment schedule

• Loss of collateral

• Business failure and loss of investment

• Low interest rates

Which financial term refers to the money a company owes to others?

• Equity

• Debt

• Asset

• Dividend

When negotiating finance, which of the following is most important to potential investors?

• The company’s logo

• Expected return on investment

• The company’s website

• Office location