Debt Financing Requires Collateral That Pledges Business Assets or Personal

question 113

True/False

Debt financing requires collateral that pledges business assets or personal assets, such as a home, to secure the loan in case of default.

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Definitions:

Minimum Return

Minimum return refers to the lowest acceptable profit or benefit that an investor expects to achieve from an investment, considering the associated risks and opportunity costs.

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting overheads, taxes, interest, and other expenses.

Income from Operations

Profit generated from a company's regular business operations, excluding deductions of interest and taxes.

Minimum Acceptable Return

The minimum return on an investment that is required by an investor or fund manager, taking into account the risk of the investment.