FINANCES

(Identifying: spontaneous, temporary, and permanent sources of financing) classify each of the following sources of new financing as spontaneous, temporary, or permanent (explain):

• A manufacturing firm enters into a loan agreement with its bank that calls for annual principal and interest payments spread over the next four years.

• A retail firm orders new items of inventory that are charged to the firm’s trade credit.

• A Crown firm issues common stock to the public and uses the proceeds to upgrade its tractor fleet.

Please provide a brief explanation of each one

BOOK REFERENCE: Vernimmen, P., Quiry, P., Dallocchio, M., Le Fur, Y., & Salvi, A. (2014). Corporate finance: Theory and practice, (4th ed). Chichester, West Sussex UK: John Wiley & Sons