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CIPS Exam L3M1 Topic 4 Question 6 Discussion

Actual exam question for CIPS's L3M1 exam

Question #: 6
Topic #: 4

[All L3M1 Questions]

Sources of finance for a private sector entity primarily include (select all that apply):

ATaxpayers

BLong-term bank loans

CSales revenues

DShareholders' funds

Show Suggested Answer

Suggested Answer: B, C, D

Sources of funds for private sector commonly include revenues from sales, shareholders and long-term loans. Taxpayers would not normally be thought of as a source of funds for private sector, alt-hough in recent Coronavirus times, in some countries, such as the UK, businesses have received considerable support. But that is abnormal.

Short-term sources such as overdrafts are not to be relied upon on a regular or long-term basis.

by Alaine at Mar 18, 2024, 01:59 AM

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Ezekiel

10 months ago

That's correct, Grover. Taxpayers do not provide direct finance to private sector entities.

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Grover

10 months ago

I believe taxpayers are not a source of finance for a private sector entity.

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Willard

11 months ago

I agree with you, Ezekiel. Sales revenues can also be a source of finance for a private sector entity.

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Ezekiel

11 months ago

I think sources of finance for a private sector entity include Long-term bank loans and Shareholders' funds.

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Izetta

11 months ago

Yes, sales revenues are crucial for financing operations and growth.

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Dorsey

11 months ago

Sales revenues should also be considered as a source of finance, right?

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Maryanne

11 months ago

I agree with Virgilio, shareholders' funds are an important source of finance.

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Virgilio

11 months ago

I think sources of finance for a private sector entity include shareholders' funds, definitely.

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