1.Under what circumstances would it be advisable to borrow money to take a cash discount?

2.Discuss the relative use of credit between large and small firms. Which group is generally in the net creditor position, and why?

3.What advantages do compensating balances have for banks? Are the advantages to banks necessarily disadvantages to corporate borrowers?

4.Commercial paper may show up on corporate balance sheets as eithera current asset or a current liability. Explain this statement.

5.What are the advantages of commercial paper in comparison with bank borrowing at the prime rate? What is a disadvantage?