Large firms tend-higher rate of interest than direct paper

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Reference no: EM131497371

1. Finance paper usually carries a higher rate of interest than direct paper.

TRUE OR FALSE

2. The sale of asset-backed securities can sometimes enable the issuing firm to acquire lower-cost funds than it normally would receive from a bank loan or bond offering.

TRUE OR FALSE

3. A trust receipt acknowledges that the lender trusts the borrower to repay the loan before any dividends are paid.

TRUE OR FALSE

4. The most common form of short-term financing is a bank loan.

TRUE OR FALSE

5. The cost of not taking the discount on trade credit of 2/10, net 30 is approximately ______.

A) 44.54%

B) 43.20%

C) 36.73%

D) None of these options are true

6. Large firms tend to be

A) net users of trade credit.

B) net suppliers of trade credit.

C) firms with high levels of profitability.

D) firms with low levels of inventory turnover and accounts receivable turnover.

7. The cost of not taking the discount on trade credit of 3/20, net 90 is approximately ______.

A)15.9

B) 16.3

C) 18.0%

D) 17.4

Reference no: EM131497371

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