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Business Finance-capital structures and leverage

Total questions: 12

Worksheet time: 6mins

Name
Class
Date
1.
What does internal mean?
a)
A source from within the business
b)
A source from outside the business
2.
What does external mean?
a)
A source from within the business
b)
A source from outside the business
3.

Which is an example of an internal source of finance?

a)

Owners' Funds

b)

Venture Capital

c)

Overdraft

d)

Trade credit

4.
Which is an example of an external source of finance?
a)
Owners' Funds
b)
Hire Purchase
c)
Retained profits
d)
Sale of assets
5.
What is an advantage of owners' funds?
a)
There will be little or no interest
b)
You can pay in smaller installments
c)
They take a long time to arrange
d)
You don't have to pay it back
6.
What is an advantage of a bank loan?
a)
There will be little or no interest
b)
You can pay in smaller installments
c)
They are quick and easy to arrange
d)
You don't have to pay it back
7.

Short Term sources of finance usually require money to be repaid within.....

a)

1 week

b)

1 month

c)

6 months

d)

1 year

8.

Long Term sources of finance are for when the time needed to pay the money back is more than...

a)

6 months

b)

1 year

c)

5 years

d)

10 years

9.

Which of the following would be the most appropriate source of funds for a new business (which is just launching) that makes mobile phone accessories?

a)

Retained Profit

b)

Sale of Assets

c)

Share Capital

d)

Trade Credit

10.

The ease with which an investment can be turned into cash is?

a)

Solvency

b)

Exchange Rate

c)

Risk

d)

Liquidity

11.

A rise in the general level of prices is called?

a)

Inflation

b)

Deflation

c)

Recession

d)

Regression

12.

Is the cash a business has for its day-to-day spending.

a)

Working capital

b)

Current assets

c)

Current liabilities