chapter 16 (unit 10)
Terms in this set (20)
The usual repayment period for long-term business loans is
in 3 to 7 years
The ____ ratio is based on the principle that a high-risk investment should generate higher financial returns for a business and more conservative decisions often generate lesser returns.
What has generally no specific repayment period?
As a stockholder in the Giant Plants Company, you have the right to vote on all of the following issues
changes in the amount of common stock issued, new issues of preferred stock or bonds, amendments to the corporate charter, the sale of certain assets
All of the following are uses of long-term financing
developing and marketing new products, replacing obsolete equipment, beginning a new business, executing mergers and expansions
When each new budget is based on the dollar amounts contained in the budget from the preceding year, a company is using ____ budgeting.
The primary sources of funds available to a business include all of the following
debt capital, sales revenue, equity capital, sales of assets
Jones Manufacturing needs $450,000 to build a new plant. It must also spend $200,000 on new equipment for the plant. Both of these needs are examples of
long-term financing needs
Which of the following companies would most likely be able to issue commercial paper?
General Electric (a big corporation)
When bonds issued at the same time mature on different dates, they are referred to as ____ bonds.
Retained earnings are
a form of equity financing
A venture capital firm
consists of a pool of investors or a family partnership
Retained earnings are
Each year Caliente, Inc., follows a budgeting process. The first step is always to look at the previous year's budget and see if anything needs to be updated. Caliente uses ____ budgeting.
Assume that the First State Bank of Chicago requires a 20 percent compensating balance on short-term loans. If you borrow $50,000, at least ____ of the loan amount must be kept on deposit at the bank.
Todd develops a plan for obtaining and using the money necessary for his company to implement its goals. This is called a(n)
When compared with selling stocks to the public, a private placement has
In the ____, Kia Corporation describes the basics of the bond issue, who the trustee is, when the bonds mature, and how the bonds will be paid off.
During his job interview, Morgan was asked to talk about money received from the owners or from the sale of shares of ownership in a business. Which of the following would best describe these funds?
Venture capital firms invest in
small firms that have the potential to be very successful
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