Classification of Funds Based on Time Period

Q.

Discuss the factors affecting the choice of sources of funds.

Q.

Medium term financing means financing for a period of __________.

1. 2-5 years

2. 3-5 years

3. 2-4 years

4. 1-2 years

Q.

Explain the classification of sources of funds on the basis of period.

Q.

Give one point of difference between debentures and public deposits.

Q.

Discuss the various characteristics of debenture.

Q.

Find the odd one out from the sources of long-term funds.

1. Debentures

2. Shares

3. Commercial Paper

4. Loans from banks

Q.

As a finance manager, advise the directors about various sources of finance for financing the expansion of your company.

Q.

What are the types of marshalling?

Q.

What factors influence the working capital need in a business?

Q.

Briefly explain three advantages of issuing debentures.

Q.

______________________ is most common for financing of current assets, such as account receivable and inventories.

1. Medium-term financing

2. Owner's fund

3. Short-term financing

4. Long-term financing

Q. Explain briefly the purposes for which long term finance is required by business concerns?

Q. ___sources of finance serves for more than one year and less than 5 years.

1. None of the above
2. Long term
3. Medium term
4. Short term

Q. What do you mean by long term finance?

Q. Medium term sources serves for more than one year and less than 5 years.

1. True
2. False

Q. Short-term funds are like the one used to pay the creditors, for less than a year.

1. True
2. False

Q. Which of the following is/are the purposes of short term finance?

1. It facilitates the smooth running of business operations by meeting day to day financial requirements.
2. It enables firms to hold stock of raw materials and finished product.
3. To increase the volume of production at a short notice.
4. All of the above

Q. Bright Light Co. manufactures electrical appliances. Finance manager of the Company is
looking for a financial instrument which fulfulls his long term finance needs but has Tax
advantage to it. Suggest him which source of finance should he use. Give four advantages
of this source.

Q. Short –term sources of funds serves for the period more than one year.

1. True
2. False

Q. Purchase of land and buildings, plants and machinery are examples of medium-term finance.

1. False
2. True

Q. How sources of funds are classified on the basis of time period?

1. Long term sources
2. Medium term sources
3. Short term sources
4. All of the above

Q. For medium-term finance, the repayment period is between one to five years.

1. True
2. False