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Debt Financing Quiz
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Debt Financing Quiz

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@IdolizedPrairie

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Questions and Answers

What is the main characteristic of debt financing?

  • Involves payback of funds plus a fee for the use of money (correct)
  • Involves receiving funds without any cost
  • Involves sharing ownership of the venture
  • Does not require repayment of funds

    • What is the typical duration of short-term borrowing?

  • Two to three years
  • Five years or more
  • One year or less (correct)
  • Depends on the lender's preference

    • What is a common question asked by commercial banks when considering a loan application?

  • How many competitors do you have
  • What is your favorite business model
  • What do you plan to do with the money (correct)
  • How many employees do you have

    • Why is it important for entrepreneurs to be clear about the amount of money needed when applying for a loan?

    <p>Clarity increases the likelihood of loan approval</p> Signup and view all the answers

    What is the significance of repayment corresponding to a milestone in the business plan?

    <p>Repayment should align with the business's progress</p> Signup and view all the answers

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