Financing a Business Enterprise Quiz

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What is the key challenge faced by managers when financing a business enterprise?

Choosing the most expensive source of finance

Relying solely on internal sources of finance

Selecting the longest-term financial source

Selecting the right source and mix of finance (correct)

How is ownership and control classified in sources of finance?

Based on the business sector

By transaction amount

By geographical location

Into owned and borrowed capital (correct)

What is the time period classification of sources of financing based on?

Types of products financed

Duration of the financing provided (correct)

Land ownership

Geographical span

Which term is used for financing that occurs between 1 and 3 years?

Medium-term financing Signup and view all the answers

Why is it essential for managers to understand the characteristics of financial sources?

To analyse and compare resources effectively Signup and view all the answers

What is the purpose of retaining earnings in a company?

To reinvest in growth opportunities Signup and view all the answers

Why is asset redeployment considered important for a company?

To increase efficiency and profitability Signup and view all the answers

How does depreciation impact a company's financials?

It decreases the amount of reported earnings and increases free cash flow Signup and view all the answers

What is the characteristic of accrued liabilities as a source of financing?

Periodic and interest-free financing source Signup and view all the answers

In what areas can companies typically reinvest their retained earnings?

Growing research and development capabilities Signup and view all the answers

Financing a Business Enterprise Quiz

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Questions and Answers

What is the key challenge faced by managers when financing a business enterprise?

How is ownership and control classified in sources of finance?

What is the time period classification of sources of financing based on?

Which term is used for financing that occurs between 1 and 3 years?

Why is it essential for managers to understand the characteristics of financial sources?

What is the purpose of retaining earnings in a company?

Why is asset redeployment considered important for a company?

How does depreciation impact a company's financials?

What is the characteristic of accrued liabilities as a source of financing?

In what areas can companies typically reinvest their retained earnings?

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