Why Is It Necessary for a Business Firm to Put

question 169

Multiple Choice

Why is it necessary for a business firm to put up collateral when it takes out a loan?

• A) So that the bank can keep a portion as advance payment on the loan
• B) To show the bank that the business is big enough to require the loan
• C) To assure the bank that loan payments will be made as promised
• D) So the financial managers know dates of payment
• E) So that the accounting people can generate accurate financial statements

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Definitions:

Laboratory Research

Systematic investigation and experimentation carried out in controlled environments to discover new knowledge or validate theories.

Primary Consumer

An organism that feeds directly on producers, such as plants or phytoplankton, in an ecosystem. Also known as herbivores.

Trophic Level

The position an organism occupies in a food chain, often categorized into levels such as primary producers, primary consumers, and higher-level consumers.