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:

Net Present Value

A method used to evaluate investments by calculating the present value of expected future cash flows minus the initial investment cost.

Cash Inflows

Refers to the money received by a company during a particular period, including revenues from sales, investments, and financing activities.

Minimum Acceptable Rate

The lowest rate of return on an investment that a manager or investor is willing to accept.

Investment Decision

The process of making choices about where to allocate funds in various assets with the aim of generating returns over time.