1. How does short-term financing differ from long-term financing? Give two business uses for each type of financing.
   
   
2. What is the function of a cash budget? A capital budget?
   
   
3. What is zero-base budgeting? How does it differ from the traditional concept of budgeting?
   
   
4. What are four general sources of funds?
   
   
5. How does a financial manager monitor and evaluate a firm's financing?
   
   
6. How important is trade credit as a source of short-term financing?
   
   
7. What is the prime rate? Who gets the prime rate?
   
   
8. Why would a supplier require a customer to sign a promissory note?
   
   
9. What is the difference between a line of credit and a revolving credit agreement?
   
   
10. Explain how factoring works. Of what benefit is factoring to a firm that sells its receivables?
    
    
11. What are the advantages of financing through the sale of stock?
    
    
12. From a corporation's point of view, how does preferred stock differ from common stock?
    
    
13. Where do a corporation's retained earnings come from? What are the advantages of this type of financing?
    
    
14. What is venture capital?
    
    
15. Describe how financial leverage can increase the return on owners' equity.
    
    
16. For the corporation, what are the advantages of corporate bonds over long-term loans?
    
    
17. Describe the three methods used to ensure that funds are available to redeem corporate bonds at maturity.