Which of the Following Is a Source of Long-Term Funds

question 25

Multiple Choice

Which of the following is a source of long-term funds for firms?

• A) Trade credit
• B) Revolving credit agreements
• C) Factoring
• D) Corporate bonds

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Definitions:

Qualified Mortgage Interest

Interest paid on a mortgage that is eligible for tax deduction within the limits set by the IRS.

At-risk Rules

These are tax rules designed to limit the amount of deductible losses from businesses or income-producing activities to the amount the taxpayer has at risk.

Passive Loss Rules

Tax regulations that limit the amount of losses investors can deduct from passive activities, including some investments in real estate.

Materially Participate

The level of involvement by a taxpayer in the operations of a business that is sufficient enough to qualify for tax deductions related to active participation.