Chapter 8 Flashcards
1
Q
two main sources of short-term financing for businesses are:
A
- bank credit, loans
- trade credit, accounts payable
2
Q
Formula to solve all questions for this chapter
A
i = prt
3
Q
what is r
A
effective annual interest rate (cost of borrowing)
4
Q
What is i
A
amount of interest paid to the lender in dollars
5
Q
what is p
A
the usable amount of funds received from the loan from the borrower’s POV
6
Q
what is t
A
the time period over which interest is accrued, in years.
