Kroger's Grocery Chain Wants to Finance the Purchase of a New

question 57

Multiple Choice

Kroger's grocery chain wants to finance the purchase of a new warehouse.It decides to sell bonds.

• A)Kroger's plans to use equity financing and its action is part of the demand for loanable funds.
• B)Kroger's plans to use equity financing and its action is part of the supply of loanable funds.
• C)Kroger's plans to use debt financing and its action is part of the demand for loanable funds.
• D)Kroger's plans to use debt financing and its action is part of the supply of loanable funds.

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Definitions:

Gain on Sale

The financial profit earned from selling an asset for more than its book value.

Interest Revenue

Earnings generated by providing loans or placing money into financial vehicles that accrue interest.

Temporary Investment

Short-term investments made by a company to earn a return on idle cash without impacting its liquidity.

Long-Term Investment

Investments held for an extended period, usually more than one year, with the intention of gaining significant returns over time.