Question: Typically, only highly regarded customers with financial stability receive __________.

1. secured loans

2. B. bank premiums

3. C. unsecured loans

4. D. commercial paper

5. Answer: C. unsecured loans

6. Question: A firm negotiates a(n) _________ with its bank. This arrangement gives the firm access to a specified amount of unsecured short-term funds, provided the bank has the funds available.

7. A. asset drawing account

8. B. capital drawing agreement

9. C. reserve account

10. D. line of credit

11. Answer: D. line of credit

12. Question: By selling shares of ownership in their company, California Scientific acquires the funds needed to finance their research and development projects. California Scientific provides for their long-term funding needs through ________ financing.

13. A. debt

14. B. equity

15. C. retained

16. D. asset

17. Answer: B. equity

18. Question: An effective budget requires:

19. A. a successful advertising campaign.

20. B. accurate forecasts.

21. C. management approval.

22. D. stakeholder consensus.

23. Answer: B. accurate forecasts.

24. Question: Delaware Aluminum uses its stock of unsold aluminum products as collateral for a short-term loan. This arrangement represents:

25. A. a secured loan.

26. B. a revolving credit agreement.

27. C. factoring.

28. D. an unsecured loan.

29. Answer: A. a secured loan.

30. Question: By borrowing $10 million from First Dayton Bank, Hi-Lo Industries is utilizing ________.

31. A. equity financing.

32. B. debt financing.

33. C. liability funding.

34. D. asset funding.

35. Answer: B. debt financing.

36. Question:

37. Answer: A. Permitting customers to pay with credit cards or on credit makes it easier for them to buy, and it also attracts new customers.

38. Question: If a company secures a three year bank loan, it is considered _________.

39. A. short-term financing

40. B. asset funding

41. C. liability funding

42. D. long-term financing

43. Answer: D. long-term financing

44. Question: Which of the following represents a source of short-term funding?

45. A. Retained earnings

46. B. Commercial paper

47. C. Common stock

48. D. Corporate bonds

49. Answer: B. Commercial paper

50. Question: Which of these statements about corporate bonds is correct?

51. A. Bonds provide equity financing.

52. B. Issuing new bonds dilutes the existing ownership in the firm.

53. C. Interest paid to bondholders represents a tax-deductible business expense.

54. D. Debenture bonds require assets pledged as collateral.

55. Answer: C. Interest paid to bondholders represents a tax-deductible business expense.