Of the Following Sources of External Finance for American Nonfinancial

question 84

Multiple Choice

Of the following sources of external finance for American nonfinancial businesses,the least important is

• A)loans from banks.
• B)stocks.
• C)bonds and commercial paper.
• D)loans from other financial intermediaries.

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Definitions:

Average Collection Period

The average number of days it takes for a company to collect payments from its credit sales, a measure of the effectiveness of its credit and collection policies.

Year-End Balance

The final amount of money in an account at the conclusion of a financial year, after all transactions have been accounted for.

Forecasted Net Income

An estimate of a company's profit for a future period, calculated by projecting revenues and subtracting anticipated expenses.

Competitive Pricing

A pricing strategy where a product's price is set based on the prices of similar products offered by competing businesses in the market.