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Which one of the following provides a spontaneous source of financing for a firm?
Suggested Answer: A
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Choice 'a' is correct. Accounts payable provide a spontaneous source of financing for a firm.
Choice 'b' is incorrect. Accounts receivable take time to factor.
Choices 'c' and 'd' are incorrect.
Each of the following take time to issue:
C Debentures.
D Preferred stock.
26 comments · newest first
BO
Bobbie
3 months ago
True! It’s spontaneous and doesn’t require immediate repayment.
LA
Lauran
3 months ago
Agreed! It’s a great way to finance operations without interest.
CA
Carey
3 months ago
Definitely! It’s like free credit from suppliers.
GR
Graciela
4 months ago
I think it's accounts payable. It helps firms manage cash flow.
PA
Pamella
5 months ago
Nope, small firms can use it too!
LO
Lon
5 months ago
I thought it was just for big companies?
DO
Doyle
5 months ago
Wait, isn't that just a short-term loan?
JE
Jesus
6 months ago
Totally agree, it's often overlooked.
BU
Buddy
6 months ago
Trade credit is a great example!
RO
Ronny
6 months ago
Isn't the answer Angel investors? They provide a pretty spontaneous source of financing.
BE
Bette
6 months ago
Crowdfunding seems like a spontaneous way for a firm to get financing these days.
CL
Cletus
6 months ago
Haha, I bet the answer is Unicorn tears. Everyone knows that's the best source of spontaneous financing!
SH
Shawnna
6 months ago
I think the answer is Retained earnings. That's a spontaneous source of financing, right?
DO
Dorothy
7 months ago
The correct answer is Venture capital. It provides a spontaneous source of financing for a firm.
GA
Gary
7 months ago
I feel like we covered this in our last review session, and I want to say that accrued expenses might fit the definition of spontaneous financing.
MA
Magda
7 months ago
I’m a bit confused; I thought spontaneous financing was related to short-term liabilities, but I can't recall the exact examples we discussed.
VE
Verdell
8 months ago
I remember a practice question about financing sources, and I think trade credit was mentioned as a spontaneous option.
JA
Jamal
8 months ago
I think a spontaneous source of financing could be accounts payable, but I'm not entirely sure if that's the right term they used in class.
RI
Rickie
8 months ago
I've got a few ideas on this, but I want to make sure I'm really clear on what qualifies as a "spontaneous" source of financing before I commit to an answer. Gotta be careful on these tricky wording questions.
DI
Dierdre
8 months ago
I'm a little unsure about this one. I'll need to review my notes on corporate finance to make sure I understand the distinctions between different financing methods. Spontaneous source is the key here.
JA
Javier
8 months ago
Okay, for this I'd want to focus on financing that doesn't require a lot of planning or approval, like taking out a loan or issuing stock. Something more reactive rather than a long-term strategy.
CH
Cherilyn
9 months ago
Hmm, this seems like it could be a tricky one. I'll need to think through the different financing sources a firm might have access to and which ones would be considered more spontaneous or immediate.
MA
Mayra
9 months ago
I think this is asking about different types of financing options for a firm. I'd want to consider things like equity financing, debt financing, and other potential sources of capital.
SU
Susana
2 months ago
True, but debt financing usually requires planning.
AM
Amira
3 months ago
What about retained earnings? They can be spontaneous too.
SH
Shaquana
3 months ago
I believe equity financing is a spontaneous source.