Bank Debt Is Not a Realistic Source of Financing for Start-Ups

question 22

Multiple Choice

Bank debt is not a realistic source of financing for start-ups due to all of the following reasons except?

• A) a large portion of the assets are intangible and provide no collateral
• B) payables either don't yet exist or its history is inadequate
• C) the start-up's dependence on a small number of irreplaceable people is not a good match to demand deposits or other bank liabilities
• D) receivables collection track record is incomplete
• E) in the event of a default, it is now plausible for the bank to install a management team to help right the operations

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Definitions:

Mental Age

A measure of an individual's cognitive ability expressed as the age at which an average individual achieves the same ability.

Analytical Intelligence

The ability to analyze, evaluate, judge, or compare and contrast information, often considered a component of general intelligence.

Creative Intelligence

The ability to use imagination and innovation to solve problems, often linked with the capability to see new perspectives.

Robert Sternberg

An American psychologist known for his work on intelligence, creativity, wisdom, and love, including the development of Sternberg's Triangular Model of Love.