What are the five C's of Credit?
What will be an ideal response?
Answer: Lenders have coined the phrase, "The five C's of Credit," to summarize the qualities they look for before granting credit: (1) Character, (2) Capacity, (3) Capital, (4) Collateral, and (5) Conditions.
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Users of an issuer's financial statements demand independent audits because:
a. Users demand assurance that fraud does not exist b. Management may not be objective in reporting c. Management relies on the auditor to improve internal control d. Users expect auditors to correct management errors
The ability to understand the short-term and long-term impact of investment decisions is a fundamental concept that a nonfinancial manager should understand in order to:
A) better assess the current environment in which the firm operates. B) better assess future financing requirements. C) better understand the role of capital markets in raising long-term funds. D) None of the above.