The Failure to Have a License Will Not Render Agreements

question 22

Multiple Choice

The failure to have a license will not render agreements void if the license:

• A) is based on formal education
• B) is required for engaging in a particular business or trade
• C) is a regulatory license
• D) is readily obtainable by anyone who offers payment of a required fee

Identify the conditions under which a firm may require more short-term financing and understand the impact of company policies (flexible vs. restrictive) on financing needs.

Comprehend different inventory financing arrangements and their implications for firms.

Understand the importance and mechanisms of securing short-term loans, including the use of collateral and the impact of various loan structures on a firm’s liquidity and cash flow.

Identify sources of cash and strategies for managing short-term liabilities to optimize working capital.

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Definitions:

Auction

A public sale where goods or property are sold to the highest bidder.

Face Value

The nominal value stated on a financial instrument, such as a bond or stock certificate.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for financing payroll, accounts payable, and inventories.

Simple Interest

Interest that is computed solely on the initial sum invested or loaned, not taking into account any accumulated interest from previous periods.