All of the Following Are Uses of Long-Term Financing EXCEPT

question 40

Multiple Choice

All of the following are uses of long-term financing EXCEPT which one?

• A) replacing obsolete equipment
• B) eliminating immediate cash-flow problems
• C) beginning a new business
• D) executing mergers and expansions

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Definitions:

Zero Balance Account

A zero balance account is a type of bank account that maintains a balance of zero dollars by automatically transferring funds from a master account in the exact amount of transactions clearing the account.

Line of Credit

A flexible loan from a bank or financial institution, where a borrower can access funds up to a specified limit at any time.

Lockbox System

A service provided by banks to process payments quickly by allowing companies to have their customers send payments to a special post office box.

Disbursement Float

The time lag between when a payment is issued by a payer and when the funds are actually withdrawn from the payer's account.