Have an account?
Skip to Content
Build your own quiz
Suggestions for you
15 questions
Show Answers
See Preview
- 1. Multiple Choice
The Board of Ching Shu, a debt collection firm, decides to postpone the payout of shareholder dividends. The funds are used to open new offices, increasing their circle of activity. The shareholders think this is a great move as they think this will increase their stock value over time.
This is an example of:
Debt Factoring
Retained Profits
Working Capital
Leasing
- 2. Multiple Choice
A hospital wants to open a maternity ward (The department of a hospital that provides care for women during pregnancy and childbirth as well as for newborn infants). They have the space, but don’t exactly have the needed funds, so they talk to their supplier. The supplier promises to fit out the maternity ward with equipment, in return for a monthly fee, in stead of the purchase price.
This is an example of:
Venture Capital
Leasing
Bank Loan
Debentures
- 3. Multiple Choice
Juan’s construction firm has some issues with people who haven’t paid their bills. He has more than $ 40.000 outstanding, and he has issues paying for the materials he needs to keep the company going.
He talks to Shark International, a firm from Hong Kong, and manages to offload the bills to them in return for $ 25.000 cash, and now Shark International will chase these people for the money owed.
It will remove a lot of the profit Juan made originally, but at least he is rid of these unpaid bills and can buy materials again to make new profits, so Juan is actually very happy.
This is an example of:
Debt Factoring
Overdraft
Sales of Assets
Bank Loan
- 4. Multiple Choice
MegaBurger talks to the bank to finance the opening of 2 new MegaBurger locations in Abu Dhabi. After deliberating if this a good move, Banks offers MegaBurger 4 million AED (the currency of the United Arab Emirates) at 5% interest.
This is an example of:
Debt Factoring
Hire Purchase
Sale and leaseback
Bank Loans
- 5. Multiple Choice
Atomic research firm ‘GammaTech’ thinks they figured out fusion power (an experimental form of power generation that generates electricity by using nuclear fusion reactions).
Setting up a test lab won’t be cheap. So they petition the government, because they know there is some national budget for this kind of research. The government agrees and sends them $ 2M, without any expectation to get it back.
This is an example of:
Debentures
Grants
Overdraft
Venture Capital
- 6. Multiple Choice
On a flight from Miami to Tokyo, Watanabe Ushihara meets an engineer who poured every cent he had into a new process that uses specially treated gold particles to turn carbon dioxide, into oxygen gas and powdered carbon. The engineer is financially at a dead end and nobody wants to invest in his idea. In fact, he is now on his way to sell his late uncle’s apartment in Osaka just to make ends meet.
Mr. Ushihara is an extremely wealthy man and tells the man not to sell the house. He also ask to the engineer to meet him the next day in a restaurant in Tokyo, where he offers the engineer a partnership so he can continue his business.
This is an example of:
Venture Capital
Retained Profits
Bank Loans
Grants
- 7. Multiple Choice
The owner of Jack’s Furniture Workshop, a one man company, manages to get a massive order to fit out a secondary school in Michigan. He puts $10.000 of his savings into the company so he can buy the needed raw materials, fully expecting to earn it back quickly.
This is an example of:
Owners' Fund
Trade Credit
Overdraft
Hire Purchase
- 8. Multiple Choice
The ‘Healthy Heart’ Fruit company wants to expand into juices. They need to buy a juicer. After that, they ask their fruit supplier to agree with them paying their bills after three months, in stead of the normal 30 days.
The supplier agree because they know that the juicer will probably mean they will sell more fruits.
This is an example of:
Bank Loan
Debentures
Trade Credit
Leasing
- 9. Multiple Choice
Ali Ashraf, the owner of a groundworks firm, sees his costs are on the high side. He sells his two oldest, slowest excavators, and with the money he buys one new one of the latest much faster models, expecting work faster while he saves on fuel, and thus improve his balance sheet.
This is an example of:
Sales and Leaseback
Sales of Assets
Leasing
Debentures
- 10. Multiple Choice
A small accountancy firm knows it’s not tax season yet, but soon it will be. To pay the salaries, they dip slightly under the positive level of their bank account, knowing they’ll make enough next month to be in the black again.
This is an example of:
Debt Factoring
Trade Credit
Owners' fund
Overdraft
- 11. Multiple Choice
Jack has a fabulous idea for an app.
Jack's friend who also in the app business, gives him the phone number of Jakanda Operations.
Jakanda Operations is founded by a group of industry professionals who pooled their funds to invest in app concepts. He shows them the app and they decide Jakanda will participate in the development in return for 40% of the shares and an additional 20% of any profits. Jack agrees, and gets the money needed to develop the app.
This is an example of:
Venture Capital
Debt Factoring
Trade Credit
Retained Profits
- 12. Multiple Choice
Which is an example of an external source of finance?
Owners' Fund
Retained Profits
Sale of Assets
Bank Loans
- 13. Multiple Choice
What is an advantage of a bank loan?
There will be little or no interest
They are quick and easy to arrange
You can pay in smaller installments
You don't have to pay it back
- 14. Multiple Choice
Working capital =
Current assets -Current Liabilities
Current Assets/Current Liabilities
Current Assets + Current Liabilities
Current Assets*Current Liabilities
- 15. Multiple Choice
Which of the following is NOT true of working capital?
It is the amount of capital the firm has available to pay for its operations
The amount of money a firm has to spend in the short term
It is a measure of the firm's liquidity and financial health
It is the sum total of a firm's fixed assets
- Answer choicesTagsAnswer choicesTags