Finance Unit 3: Expenditures and Funding Sources

<p>It can be time-consuming to find a buyer (C)</p> Signup and view all the answers

<p>It is a permanent source of capital (D)</p> Signup and view all the answers

<p>Failure to repay may result in asset seizure (D)</p> Signup and view all the answers

<p>They do not exist since profits are not yet generated (D)</p> Signup and view all the answers

<p>It is the only available source of finance for businesses (A)</p> Signup and view all the answers

<p>Delaying payment to suppliers (D)</p> Signup and view all the answers

<p>Strong competition among campaigns (A)</p> Signup and view all the answers

<p>Provides access to financial services (B)</p> Signup and view all the answers

<p>High long-term costs compared to purchasing (A)</p> Signup and view all the answers

<p>Banks can demand repayment at short notice (B)</p> Signup and view all the answers

<p>By allowing liquidity through delayed payments (A)</p> Signup and view all the answers

<p>Compelling and unique project differentiation (B)</p> Signup and view all the answers

<p>Strict eligibility criteria for borrowers (A)</p> Signup and view all the answers

<p>It may lead to limited funds (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>No interest payments</p> Signup and view all the answers

<p>costs, dividends</p> Signup and view all the answers

<p>It provides immediate cash (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Personal funds = Easy to acquire Share capital = No interest payments Loan capital = Quick access Retained profits = Permanent source of finance</p> Signup and view all the answers

<p>Insufficient for business growth</p> Signup and view all the answers

<p>Flexible finance for unexpected large cash outflows (A)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>The long-term cost of leasing can exceed the cost of purchasing.</p> Signup and view all the answers

<p>requirements</p> Signup and view all the answers

<p>High risk of default (D)</p> Signup and view all the answers

<p>Overdraft = Flexible finance for unexpected needs Trade Credit = Delays payment to suppliers Crowdfunding = Funding from many small investors Microfinance = Accessible credit with no collateral</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>Banks can demand repayment at short notice.</p> Signup and view all the answers

Money spent on long-term assets like land, buildings, equipment, and vehicles.

Money spent on day-to-day business expenses like wages, raw materials, and utilities.

Money from the owner's savings, friends, or family for sole traders.

Profits kept by a company after paying all expenses and dividends.

Money raised by selling shares in a company.

Money borrowed from banks or other financial institutions, with interest.

Selling unused assets to raise funds.

Money raised from outside the business like loans and selling shares.

When a bank allows a firm to withdraw more money than they have in their account.

Flexibility in handling unexpected cash outflows and ability to spend more than available funds.

Banks can demand repayment quickly and charge potentially high interest rates.

An agreement between businesses where payment for goods/services is deferred.

Better cash flow for buyers, and interest-free funding.

Potential for strained relations with suppliers if payments are delayed and missing discounts.

Raising funds by collecting small amounts from a large number of people.

High competition and need for unique campaign differentiation for success.

Money contributed by the sole trader, usually from personal savings.

Startup businesses are new and may not have generated enough profit yet to retain anything.

An overdraft is when a bank lets a business withdraw more money than they have in their account.

Trade credit is an agreement where businesses can purchase goods or services and pay later.

Crowdfunding is the practice of raising money from a large number of people, each contributing small amounts.