Sources of Funds For Businesses - SS1 Economics Past Questions & Answers - page 1

1

Which of the following is not a source of funds for businesses?

A

 Equity financing

B

Debt financing

 

C

Government financing

D

Asset financing

 

CORRECT OPTION: d
2

What is equity financing?

A

Borrowing money from lenders

B

Obtaining funding from government grants

 

C

Raising funds by selling shares of ownership in the company to investors

D

Reinvesting profits back into the business

CORRECT OPTION: c
3

Which of the following is an example of debt financing?

A

Crowdfunding

B

Retained earnings

 

C

Bank loan

D

Government grant

 

CORRECT OPTION: c
4

What is government financing?

A

Raising funds by selling shares of ownership in the company to investors

B

Borrowing money from lenders

C

Obtaining funding from government grants, loans, or tax credits

 

D

Reinvesting profits back into the business

CORRECT OPTION: c
5

What is crowdfunding?

A

Raising funds by selling shares of ownership in the company to investors

B

Borrowing money from lenders

C

Obtaining funding from government grants, loans, or tax credits

D

Raising funds from a large number of people through online platforms

 

CORRECT OPTION: d
6

What is retained earnings?

 

Reinvesting profits back into the business rather than paying them out as dividends to shareholders.

7

What is the main difference between equity and debt financing?

Equity financing involves selling shares of ownership in the company to investors, while debt financing involves borrowing money from lenders and repaying it with interest over a specific period.

 

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