Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 1, Problem 14MC
All of the following are sustainable methods businesses can use to raise capital (funding) except for ________.
A. borrowing from lenders
B. selling ownership shares
C. profitable operations
D. tax refunds
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what comment can be made on this or what can be added to it?
The weighted average cost of capital is a calculation that can be done by a business to determine how much it will cost to borrow money to generate capital (WACC, n.d.). The result of this calculation will help business determine if financing a project is an investment that will yield positive returns (WACC, n.d.). The WACC takes into account the cost of equity and the cost of debt to figure out whether an investment is worth taking on (WACC, n.d.).
There are various ways companies can acquire capital to finance major projects (issuing stock or issuing debt), discuss the advantages and disadvantages of each financing method? Do you think one is better than the other?
What are the sources of short-term funding available to large corporations? Differentiate these sources from those needed to raise funds for a long-term capital investment.
Chapter 1 Solutions
Principles of Accounting Volume 1
Ch. 1 - Accounting is sometimes called the language of...Ch. 1 - Financial accounting information ________. A....Ch. 1 - External users of financial accounting information...Ch. 1 - Which of the following groups would have access to...Ch. 1 - All of the following are examples of managerial...Ch. 1 - Which of the following is not true? A....Ch. 1 - The primary purpose of what type of business is to...Ch. 1 - Which of the following is not an example of a...Ch. 1 - A governmental agency can best be described by...Ch. 1 - Which of the following is likely not a type of...
Ch. 1 - Which of the following is not considered a...Ch. 1 - Stockholders can best be defined as which of the...Ch. 1 - Which of the following sell stock on an organized...Ch. 1 - All of the following are sustainable methods...Ch. 1 - The accounting information of a privately held...Ch. 1 - Which of the following skills/attributes is not a...Ch. 1 - Which of the following is typically required for...Ch. 1 - Typical accounting tasks include all of the...Ch. 1 - What type of organization primarily offers tax...Ch. 1 - Most states require 150 semester hours of college...Ch. 1 - Research your top five career choices. Identify...Ch. 1 - Using the same top five career choices, identify...Ch. 1 - Think about a recent purchase you made. Describe...Ch. 1 - Computerized accounting systems help businesses...Ch. 1 - The following information was taken from the...Ch. 1 - The following chart shows the price of Netflix...Ch. 1 - Use the internet to research one for-profit, one...Ch. 1 - Use the internet to research one manufacturing,...Ch. 1 - Assume you are considering opening a retail...Ch. 1 - Uber and Lyft are two popular ride-sharing...Ch. 1 - How would you categorize or classify a company...Ch. 1 - Charity Navigator...Ch. 1 - Use the internet to visit the Securities and...Ch. 1 - Imagine that you have just been elected president...Ch. 1 - According to a company press release, on January...Ch. 1 - The Dow Jones Industrial Average (DJIA) is often...Ch. 1 - Many professional certifications now have...Ch. 1 - The Certified Public Accountant (CPA) exam is a...
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Similar questions
- How much interest rate is considered favorable for businesses in lending investment capitalarrow_forwardDiscuss the implications of financing through debt as they compare to financing through equity. What are the pros and cons of each method? Which method would you use to raise capital for your business?arrow_forwardAccording to the M&M propositions WITH and WITHOUT taxes, should a financial manager spend time analysing a firm’s capital structure? What is the optimal capital structure with and without tax? Discuss.arrow_forward
- Every business needs money to fulfill its financial requirements and also for growth. Business owners try to find money from various sources to fund their businesses.Required:Briefly explain the following sources of finance:(a) Hire Purchase (b) Factoring (c) Equity Share Capital(d) Preference Share Capital (e) Leasing (f) Debentures (g) Depreciation fundarrow_forward“Efficient working Capital management leads to improve the operating performance of the business concern and it helps to meet the short-term liquidity” Do you agree with the above statement? Explain. What are the types of working capital policies? Explain and compare of working capital financing policies in criteria of (1) Approach (2) Risk level (3) Profitability (4) Interest costs, and (5) Liquidity management.arrow_forwardWorking capital management includes which one of the following? OA. Deciding which new projects to accept B. Deciding whether to purchase a new machine or fix a currently owned machine OC. Determining which customers will be granted credit OD. Determining how many new shares of stock should be issued OE. Establishing the target debt-equity ratioarrow_forward
- 1) Describe the various sources of finance a company can use in meeting their long-term and short-term financial needs?2) A balanced capital structure is important for the overall health of the company. explain how an ideal capital structure should help the company for the success of its business?arrow_forwardLists the long-term sources of financing used by companies to finance investment capital, in order from least to greatest cost, and explains what is the factor that causes one source of capital to be more or less expensive than the other sources.arrow_forwardconsidering short term financing for working capital requirement. What are three key factors that should be considered in selecting different sources of short term financing for a company raising capital.arrow_forward
- As a micro-enterprise, which sets of financing are the most likely to be used? *A. Banks and venture capitalistsB. Tax holidays and leasesC. Retained earnings and convertible securitiesD. Public issuance of equity and debtarrow_forwardWhile determining which companies will receive capital, what information do investors and creditors needs?arrow_forwardIn corporate finance, the financing and investment decisions are related to questions concerning: how to generate profits and expand operations. how to reduce costs and survive. how to acquire and employ or invest funds. all of the given options.arrow_forward
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