PRM Exam 2 (Final) Questions & Answers 2023/2024

PRM Exam 2 (Final) Questions & Answers 2023/2024 Types of capital and definitions - ANSWER-Working capital: money available to carry on day-to day activities Short-term capital: money borrowed to finance obligations over short time period Long-term capital: longer time period (as much as 10 years) Sources for long-term capital - ANSWER-Personal funds Equity financing (selling partial ownership to investors) Debt financing: loans with interest Sources of equity financing - ANSWER-Partner -General: helps with management -Limited: not involved in mgmt Relative Friend Venture capitalist Stocks -Common: max return on investment -Preferred: gives investor first prefernce on company assets after debtors receive their money -Convertible preferred stocks Sources of debt financing - ANSWER-Commercial banks Commercial finance companies Life insurance companies Consumer finance companes Government (Samll Business Administration)