Homework Answers
Ans a) The interest rate is usually lower than for equivalent bank loans.
It is not free, interest rate is there.
It is not readily available for most of the firms, it is available only for large blue chip companies.
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Which of the following is an advantage of using commercial paper for short-term credit? a. The...
Which of the following is an advantage of using commercial paper for short-term credit? . The...
Which of the following is an advantage of using commercial paper for short-term credit? . The interest rate is usually lower than for equivalent bank loans. b It is a type of free credit A readily available source of credit for most firms It can be issued for very small amounts
Drop-down options: (accruals, trade credit, commercial paper, bank loans) 12. Sources of short-term financing Short-term credit,...
Drop-down options: (accruals, trade credit, commercial paper,
bank loans)
12. Sources of short-term financing Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs...
12. Sources of short-term financing Aa Aa Short-term credit, or short-term financing, is any liability that...
12. Sources of short-term financing Aa Aa Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs of the various sources of financing as...
Which of the following sources of short-term debt is free? A. Bank loans B. Commercial...
Which of the following sources of short-term debt is free? A. Bank loans B. Commercial paper C. Accruals D. Trade credit
trade credit, factoring, short term bank loans, commercial paper, direct investments from owners 3. You are...
trade credit, factoring, short term bank loans, commercial paper,
direct investments from owners
3. You are the owner of a small landscaping company. Usually, business is always good in the spring and summer, leaving enough resources to ride out the slow winter. But the revenue from last summer was unusually slow due to a severe drought, leading to less business than usual in the fall, and causing a cash shortage this winter. You need a short-term injection of cash so...
Short term Financing 1) Your firm issues 20-year bonds. This type of financing would be most...
Short term Financing 1) Your firm issues 20-year bonds. This type of financing would be most appropriate for which of the following activities? A) The support of accounts receivable B) The construction of a new warehouse C) The support of accounts payable D) The financing of inventory 2) Your firm borrows money from the bank on a short-term note due in 9 months. This type of financing would be most appropriate for which of the following activities? A) The support...
Commercial paper usually is issued Select one: a. by large corporations unable to get credit elsewhere....
Commercial paper usually is issued Select one: a. by large corporations unable to get credit elsewhere. b. for 3 to 7 years. c. for short-term financing by small businesses. d. by savings and loan associations. e. for short-term financing by large corporations.
Aa Aa 12. Short-term financing Why use short-term financing? Cash flows from operations may not be sufficient for a fir...
Aa Aa 12. Short-term financing Why use short-term financing? Cash flows from operations may not be sufficient for a firm to keep up with growth-related financing needs, or the firm may not be able to always generate enough cash flow to maintain a surplus of cash. Firms prefer to borrow now to fulfill their capital requirements through means of short-term financing or long-term financing. Both methods have their advantages and disadvantages. The following statement identifies a possible characteristic of short-term...
QUESTION 18 Match the different types of fixed income securities - Commercial Paper - TIPS A Short-term collaterali...
QUESTION 18 Match the different types of fixed income securities - Commercial Paper - TIPS A Short-term collateralized lending where the borrower offers financial securities as collateral and agrees to buy those securities back at a slightly greater value than the amount borrowed in (typically a few days. 3. Loans from one financial institution to another using money that is on deposit at a Federal Reserve Bank. - Repo or Repurchase Agreement • Bankers Acceptance - Revenue Bond . General...
2. Types of short-term bonds Short-term debt securities have a maturity of one year or less....
2. Types of short-term bonds Short-term debt securities have a maturity of one year or less. The characteristics of the debt securities will depend upon the capital n borrower and the investment needs of the lender. In the following table, identify the term that best matches each type of short-term d being described Definit Term Tiger Telecommunications Company needs to borrow $1 million overnight and is willing to secure the loan with a portfolio of securities that the borrower will...
Which of the following is an advantage of using commercial paper for short-term credit? . The interest rate is usually lower than for equivalent bank loans. b It is a type of free credit A readily available source of credit for most firms It can be issued for very small amounts
Drop-down options: (accruals, trade credit, commercial paper,
bank loans)
12. Sources of short-term financing Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs...
12. Sources of short-term financing Aa Aa Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs of the various sources of financing as...
trade credit, factoring, short term bank loans, commercial paper,
direct investments from owners
3. You are the owner of a small landscaping company. Usually, business is always good in the spring and summer, leaving enough resources to ride out the slow winter. But the revenue from last summer was unusually slow due to a severe drought, leading to less business than usual in the fall, and causing a cash shortage this winter. You need a short-term injection of cash so...
Aa Aa 12. Short-term financing Why use short-term financing? Cash flows from operations may not be sufficient for a firm to keep up with growth-related financing needs, or the firm may not be able to always generate enough cash flow to maintain a surplus of cash. Firms prefer to borrow now to fulfill their capital requirements through means of short-term financing or long-term financing. Both methods have their advantages and disadvantages. The following statement identifies a possible characteristic of short-term...
QUESTION 18 Match the different types of fixed income securities - Commercial Paper - TIPS A Short-term collateralized lending where the borrower offers financial securities as collateral and agrees to buy those securities back at a slightly greater value than the amount borrowed in (typically a few days. 3. Loans from one financial institution to another using money that is on deposit at a Federal Reserve Bank. - Repo or Repurchase Agreement • Bankers Acceptance - Revenue Bond . General...
2. Types of short-term bonds Short-term debt securities have a maturity of one year or less. The characteristics of the debt securities will depend upon the capital n borrower and the investment needs of the lender. In the following table, identify the term that best matches each type of short-term d being described Definit Term Tiger Telecommunications Company needs to borrow $1 million overnight and is willing to secure the loan with a portfolio of securities that the borrower will...
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