Chapter 21: Raising Business Finance
2 years ago
deanhoss
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  • Question 1
    30 seconds
    Q. Which of the following is NOT a reason why a business needs money?
    answer choices
    to start the business
    to expand the business
    to deal with a negative cash-flow problem
    to increase prices of its products
  • Question 2
    30 seconds
    Q. Which of the following is an example of revenue expenditure?
    answer choices
    paying staff wages
    buying a new truck
    extending the factory
    purchasing a machine
  • Question 3
    30 seconds
    Q. Which of the following is an example of internal finance for a limited company?
    answer choices
    selling shares
    selling debentures
    obtaining a loan
    reducing stock levels
  • Question 4
    30 seconds
    Q. Which of the following is an example of external finance for a limited company?
    answer choices
    retained profits of the company
    selling shares
    sale of assets no longer used in the business
    reducing stocks
  • Question 5
    30 seconds
    Q. An advantage that an overdraft has over a bank loan is that:
    answer choices
    it has a fixed rate of interest
    it is paid back over a fixed time period
    no dividends have to be paid to shareholders as with a loan
    the size of the overdraft varies with the needs of the firm
  • Question 6
    30 seconds
    Q. An advantage that share capital (equity capital) has over long-term loans is that:
    answer choices
    the capital never has to be repaid
    the rate of interest on shares is fixed
    the balance of control in the business will change
    dividends are paid before tax
  • Question 7
    30 seconds
    Q. An advantage to a business of leasing computers rather than buying them outright is that:
    answer choices
    the loan never has to be repaid
    the computers will never go out of date
    the total cost of leasing is less than buying the computers
    it doesn't have to find a large cash sum to buy computers
  • Question 8
    30 seconds
    Q. Which of the following business decisions is likely to need long-term finance?
    answer choices
    increasing stocks of goods for the summer season
    hiring a car for the sales manager
    building a new factory
    paying creditors for goods supplied
  • Question 9
    30 seconds
    Q. A flower seller plans to increase stocks of plants. Which is the most likely source of finance?
    answer choices
    bank overdraft
    leasing
    share issue
    debentures
  • Question 10
    30 seconds
    Q. Which sources of finance is most likely to be used by a firm planning to takeover another firm?
    answer choices
    bank overdraft
    leasing
    share issue
    trade credit
  • Question 11
    30 seconds
    Q. When a bank asks for ‘security’ before agreeing to a bank loan it means that:
    answer choices
    the offices must be securely locked at night
    firm assets will be sold by the bank if the loan isn't paid
    the assets purchased must be insured
  • Question 12
    30 seconds
    Q. Which will NOT be considered by a firm before deciding on a suitable source of finance to use?
    answer choices
    the purpose of the finance – what it will be used for
    how long the finance is used for
    the rate of interest on loans
    the views of the workers
  • Question 13
    30 seconds
    Q. Which of the following is a permanent source of finance for a company?
    answer choices
    long-term bank loan
    share capital
    creditors
    overdraft
  • Question 14
    30 seconds
    Q. A firm has applied for a bank loan. The manager will ask all of the following questions except:
    answer choices
    How big is the loan needed?
    How liquid is the business?
    How long will the loan be needed for?
    How powerful are the computers?
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