16 questions
What does internal source of finance mean?
A source from within the business
A source from outside the business
What is the best advantage of owners' funds?
There will be little or no interest
You can pay in smaller installments
They take a long time to arrange
You don't have to pay it back
What is an advantage of a bank loan?
There will be little or no interest
You can pay in pre-planned instalments
They are quick and easy to arrange
You don't have to pay it back
What is the most likely of a friends & family loan?
There will be little or no interest
You can pay in smaller installments
They take a long time to arrange
You don't have to pay it back
What is the most likely / straightforward source of finance for a small firm?
A debenture
Issuing shares
A bank loan
What is the most likely source of finance for buying property?
Mortgage
Factoring
A bank loan
What is the most likely source of finance for buying a new IT system?
Mortgage
Factoring
A bank loan
What of the following is a source of internal finance?
Selling assets
Trade credit
A bank loan
Which of the statements about retained profits is false?
You have unlimited amounts of money available
Shareholders and employees could be frustrated because there is less profit to be 'shared out'
You do not have to pay interest
You are free to use it for any purpose
A short-term source of finance from a bank that usually is only used in an emergency/when needed
Overdraft
Loan
Share capital
Credit card