As a part of their expansion plan, NYA Company that is producing notebooks is planning to buy a new production line to produce its own ink. Ordinarily, they would resort to their bank to take long-term financing to fund the purchase. However, the company is already highly leveraged, and the bank refused to give them additional funding. What is their best option now if they insist on buying the new production line? Would this type of finance be short or long term? What kind of advantages does the company have if it resorts to this type of financing?
As a part of their expansion plan, NYA Company that is producing notebooks is planning to buy a new production line to produce its own ink. Ordinarily, they would resort to their bank to take long-term financing to fund the purchase. However, the company is already highly leveraged, and the bank refused to give them additional funding. What is their best option now if they insist on buying the new production line? Would this type of finance be short or long term? What kind of advantages does the company have if it resorts to this type of financing?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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As a part of their expansion plan, NYA Company that is producing notebooks is planning to buy a new production line to produce its own ink. Ordinarily, they would resort to their bank to take long-term financing to fund the purchase. However, the company is already highly leveraged, and the bank refused to give them additional funding.
What is their best option now if they insist on buying the new production line?
Would this type of finance be short or long term?
What kind of advantages does the company have if it resorts to this type of financing?
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