Question

viestion 15 (1 point) ✓ Saved After graduating from college, Joseph Tantillo decided to start a retail Web site that specializes in personalized Greek apparel. To fund his Web site, he borrowed money from his parents (who expect to be repaid with interest). In other words, he used financing 1) debt 2) liquid 3) equity 4) venture 5) entrepreneurial

Answer 1

A) Debt Financing is the correct ansewer.

Jopesh Tanillo started a new business of retails web sites Jopesh borrowed money for its parents and repaid with interest in future. i) Debt Yes it is debt. Business and owner (owner family) are seprate legal entity, they are seprate from the business. Jonesh Tanillo parents not give money as a investment but they charge interst on there investment. ii) Liquid There is no liquidity in business. No flow of working capital (infows and outflow of cash) iii) Equity Jonesh Tanillo will return there investment with interest. Equity are non-refundanble and received dividend (not the interest). iv) Venture Capital Jonesh Tanillo will return there investment with interest. venture capital is the private equity investment provided by the veture capital firm. They give the investment in exchange of Equity shares. Equity are non-refundable and received dividend (not the interest). Entrepreneurial = Jonesh Tanillo is enterpneure but the investment are borrowing by the Jonesh is the debt Fianacing. Debt are the obligation to repaid money with interest.