CHAPTER 3 (FINANCING IN BUSINESS)

Collateral is a form of short term loan.

• true

• false

Inventory is a material and goods that are held by a company that it will sell within a year.

• true

• false

The objective of a financial plan is to minimize the profits.

• true

• false

Retained earning are net profits retained for the firm's rather than paid out in dividend to shareholder.

• true

• false

Bond have high administrative and selling cost.

• true

• false

Risk control is the concept of risk transfer and risk avoidance.

• true

• false

Pure risks is involves the possibility of obtaining a gain(profit) or loss for the company.

• true

• false

Hybrid financing has feature of common stock and retained earning.

• true

• false

Liability insurance is part of property insurance.

• true

• false

Insurance premium is a fee paid to an insurance company by policy holder.

• true

• false