Automobile Renting Business

The data required to test the hypothesis were obtained from both primary and secondary sources. Primary source data were obtained through the administration of a survey questionnaire to a sample of operators of automobile renting companies. The questionnaire was an nineitem instrument. Eight of the items were closedended in character, and sought specific information, while the ninth item was openended to permit respondents to provide additional data they considered relevant to the problem investigated. None of the members of the research sample provided additional information in responding to this questionnaire item.

Secondary source data were obtained from published material relevant to the problem investigated. These data were used to support and amplify the primary source data reported in this chapter.

A total of eight subproblems were defined in relation to the research hypothesis. These subproblems concerned (1) formal business organization, (2) financing, (3) insurance, (4) asset purchase, (5) legal issues, (6) maintenance, (7) business location, and (8) marketing. The results of the

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term financing source is flexibility. Depending upon the policies of the source, and the conditions of the financing, it may be either quite difficult, or relatively simple to alter the amount of shortterm funds provided, and to alter the terms on such financing. The three principal sources of shortterm financing for business firms are (1) trade credit, (2) commercial bank loans, and (3) commercial paper. Trade credit is translated into accounts payable for a business firm. Commercial banks extend shortterm unsecured and secured loans to business firms. Commercial paper is a negotiable instrument floated by a business firm. Typically, a business firm must be quite large and well respected, before it can generate shortterm capital through the issue of commercial paper. Other sources of shortterm capital for a business firm are (1) factoring, which amounts to the sale of a firm's accounts receivable, (2) floor planning, and (3) the bonded warehousing of inventory. These sources are not as widely used as are those described in the preceding paragraph. The members of the research sample for this study indicated that the mean leverage rate for the automobile rental firms represented by them approximated 20 percent. F
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Approximate Word count = 7334
Approximate Pages = 29 (250 words per page)

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