Instead of Borrowing Money from Suppliers to Purchase Equipment, an Increasing

question 70

Multiple Choice

Instead of borrowing money from suppliers to purchase equipment, an increasing number of small businesses are

• A) obtaining trade credit instead.
• B) making these purchases outright.
• C) choosing to lease the equipment.
• D) opting to streamline assembly processes to reduce expenditures.

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Definitions:

Per Share FCFE

Free Cash Flow to Equity (FCFE) calculated on a per-share basis, indicating the amount of cash available to shareholders per share.

Required Return

The minimum expected return by investors for investing in a risky asset, considering the risk level compared to the risk-free rate.

Per Share FCFE

Free Cash Flow to Equity per share, which indicates how much cash is available to the equity shareholders of a company after all expenses and reinvestments.

Required Return

The minimum expected return an investor demands for investing in a particular asset, considering its risk.