Chapter 10, Problem 17AA

To determine

To state: Appropriate type of financing.

Answer to Problem 17AA

Types of financing includes short term, long term or intermediate financing.

Explanation of Solution

Expansion	Type	Explanation
Buying computers	Intermediate	It is a moderate amount i.e. not so large not so small, therefore, intermediate is appropriate.
Purchasing raw materials	Short-term	Once the production is done and the goods are ready for sale, it is usually paid off.
Buying a machinery	Long term	It is a heavy capital expenditure and will require more time to pay off completely therefore, long term is required.
Purchasing a land for setting up a new factory	Long term	It is a heavy capital expenditure and will require more time to pay off completely therefore, long term is required.
Opening a new outlet	Intermediate	It is a moderate amount i.e. not so large not so small, therefore, intermediate is appropriate.

Economics Concept Introduction

Introduction: Financing is the procedure through which the companies are granted money to help them use such money in carrying out their businesses.