Which of the Following Best Describes a Company's Financing Activities

question 165

Multiple Choice

Which of the following best describes a company's financing activities?

• A)Financing activities focus on the sale of products and services.
• B)Financing activities include selling products.
• C)Financing activities enable a company to acquire assets needed to run a business.
• D)Financing activities are represented by the revenues and expenses on the income statement.

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Definitions:

Monthly Interest Rate

The interest rate that is applied on a monthly basis to the principal of a loan or mortgage to calculate the monthly interest payment.

Net Present Value

A valuation method that calculates the present value of an investment's expected cash flows, minus the initial investment cost.

Monthly Interest Rate

The percentage of interest that is charged or earned on a loan or investment over a month's time period.

Credit Policy

A set of guidelines that a company follows to determine credit terms for customers, such as payment period and discount rates.