EBK UNDERSTANDING BUSINESS
11th Edition
ISBN: 8220102809673
Author: Nickels
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 18, Problem 1CT
Summary Introduction
To think critically about: The primary sources of short term funds and long term funds for new business owner.
Introduction: Short term sources of funds refers to funds required in a business for a period of less than whereas long term sources of funds refers to funds required in a business for a period of more than 5 years.
Expert Solution & Answer
Explanation of Solution
The primary sources of short term funds and long term funds for new business owner are explained as below:
Short term sources of funds are as follows:
- Trade credit: It is a short term sources of finance in which there is an agreement between the buyer and seller where buyer can purchase goods or services on credit and make payment at later date.
- Factoring services: It is a process in which company sell its account receivable to third party at discount in order to increase capital.
- Short term loans: Like secured and unsecured loan.
- Commercial paper: It is a short term sources of funds which are available to large corporate when they need just for a few months.
Long term sources of funds are as follows:
- Equity financing: It is a long term sources of finance where entity raise its finance by selling entity’s stock to investors.
- Debt financing: It refers to a method of raising finance from any financial institution which is to be repaid along with interest.
- Venture funding: It refers to a method of financing where venture capitalist invest his money in new startup and emerging business believing that business is having great profit potential.
Conclusion
Thus, the primary sources of short term funds are trade credit, factoring service, short term loans and commercial paper and long term funds are debt, equity , venture funding and assets securitization.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Cariveh Co sells automotive supplies from 25 different locations in one country. Each branch has up to 30 staff working there, although most of the accounting systems are designed and implemented from the company's head office. All accounting systems, apart from petty cash, are computerised, with the internal audit department frequently advising and implementing controls within those systems. Cariveh has an internal audit department of six staff, all of whom have been employed at Cariveh for a minimum of five years and some for as long as 15 years. In the past, the chief internal auditor appoints staff within the internal audit department, although the chief executive officer (CEO) is responsible for appointing the chief internal auditor. The chief internal auditor reports directly to the finance director. The finance director also assists the chief internal auditor in deciding on the scope of work of the internal audit department. You are an audit manager in the internal audit…
An action or a decision cannot be ethical unless a leader reaches it using ethical processes. in favor or opposed to the statement
An action or a decision cannot be ethical unless a leader reaches it using ethical processes.
in favor or opposed to the statement abo
Chapter 18 Solutions
EBK UNDERSTANDING BUSINESS
Ch. 18.1 - Prob. 18.1AQCh. 18.2 - Prob. 1TPCh. 18.2 - Prob. 2TPCh. 18.2 - Prob. 3TPCh. 18.2 - Prob. 4TPCh. 18.3 - Prob. 18.3AQCh. 18.3 - Prob. 1MEDCh. 18.3 - Prob. 5TPCh. 18.3 - Prob. 6TPCh. 18.3 - Prob. 7TP
Ch. 18.3 - Prob. 8TPCh. 18.4 - Prob. 18.4AQCh. 18.4 - Prob. 18.4BQCh. 18.4 - Prob. 18.4CQCh. 18.4 - Prob. 9TPCh. 18.4 - Prob. 10TPCh. 18.4 - Prob. 11TPCh. 18.4 - Prob. 12TPCh. 18.5 - Prob. 18.5AQCh. 18.5 - Prob. 18.5BQCh. 18.5 - Prob. 13TPCh. 18.5 - Prob. 14TPCh. 18.5 - Prob. 15TPCh. 18.5 - Prob. 16TPCh. 18 - Prob. 1CTCh. 18 - Prob. 2CTCh. 18 - Prob. 3CTCh. 18 - Prob. 2DWSCh. 18 - Prob. 3DWSCh. 18 - Prob. 4DWSCh. 18 - Prob. 5DWSCh. 18 - Prob. 1TITCh. 18 - Prob. 2TITCh. 18 - Prob. 3TITCh. 18 - Prob. 4TITCh. 18 - Prob. 1VCCh. 18 - Prob. 2VCCh. 18 - Prob. 3VC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, management and related others by exploring similar questions and additional content below.Similar questions
- Your firm has been the auditor of Caribild Products, a listed company, for a number of years. The engagement partner has asked you to describe the matters you would consider when planning the audit for the year ended 31January 2022. During recent visit to the company you obtained the following information: (a) The management accounts for the 10 months to 30 November 2021 show a revenue of $260 million and profit before tax of $8 million. Assume sales and profits accrue evenly throughout the year. In the year ended 31 January 2021 Caribild Products had sales of $220 million and profit before tax of $16 million. (b) The company installed a new computerised inventory control system which has operated from 1 June 2021. As the inventory control system records inventory movements and current inventory quantities, the company is proposing: (i) To use the inventory quantities on the computer to value the inventory at the year-end (ii) Not to carry out an inventory count at the year-end (c)…arrow_forwarddesign a Dashboard with three (3) elements that you think would be useful to the company in providingprudent system analytics. Justify the selection of the three (3) elements and how theycontribute to decision-makingarrow_forward[ Solve without using Al" [ For the circuit shown in Fig. 2.20, the transistors are identical and have the following parameters: hfe = 50, hie = 1.1K, hre = 0, and hoe = 0. Calculate Avf, Rif and Rof. Ans: 45.4; 112 KN; 129. 150k ww 47k www + 4.7k Rif 25 V [ 10k 47k 4.7k V₁ [ w 6% R₁1000 50µF Q2 5μF I 33k 50µF 4.7k- 4.7k R₁ Rof www Fig. 2.20 Circuit for Q7. [ [ [ [arrow_forward
- In regards to the Belize Road Safety Project 2012Identify and describe the technique or method used by the project sponsor to select the project among competing or multiple other projects ideas for the country. Hint: (Benefits Measurement, Constrained Optimization, Other?) Identify and describe five (5) characteristics that made this endeavor a project. Use project data or information to support your answer.arrow_forward1.Only give a graph with proper description and 2 immage with proper description of this bellow question and mention that where from u collect that any website/article/book/reserce as reference? One of the most important questions faced by business leaders in the strategic marketing process is a choice of timing to launch new product /technologies and enter new markets. There are two options: to be a pioneer or to be a follower. Both have advantages and risks, the relative success of each strategy depends on several factors, both internal and external. the advantages of being a pioneer and follower companies. product life cycle strategies do successful pioneer and follower companies implement to increase growth and maintain a strong competitive advantage or not, examples of companies to support statements made.arrow_forward1.How relevant are the concepts of competencies to the jobs in a chicken-processing plant? 2.What information sources would be of most significance regarding jobs in a chicken-processing plant? A strategy of growth indicates growing sales, increasing demand, and expanding operations for the organization. When the organization is growing and expanding, it most likely needs to hire new employees in the future. In some cases, the organization may be able to hire employees readily without additional work. If, for example, a firm is currently receiving 100 qualified applicants per month but has only been hiring 5, the firm may be able to meet any targeted growth by simply hiring 10 people per month. In many ways, a stability strategy may be the easiest for the HR manager to implement because the organization presumably must do what it has been doing all along. But, even here, specific and subtle planning nuances must be considered. For example, the organization will naturally…arrow_forward
- Financial accountingarrow_forwardWhat are the Circuit City performance objectives, value vs NVA, opportunities to improve root cause, variation? What are the defects, opportunities, units, metrics, data collection plan, validating the measurement system for the Circuit City company? What is the protocol, methodology, data collection of a case study, could you please explain?arrow_forwardby the end of 2013, the IPL port was operational and the naphtha was flowing to the HFC plant in Central India after being granted the port contract in Summer 2012. The plant was located in an industrial area that had several pipelines in the general geographic area including a crude oil pipeline leading to a refinery, and a pipeline carrying pesticides to be processed and redistributed to local farms in the area. In July 2014, Ajay Patel, the logistics general manager received notification that there were some minor leaks along the pipeline that were being fixed. Workers in the area had experienced sudden headaches and lightheadedness and the company immediately moved to investigate the leak and address faulty seams that had eroded and weakened. The flow of naphtha was temporarily stopped for 72 hours so two portions of the pipeline could be removed, and the eroded portions replaced. Patel put enormous pressure on the repair team to get the repair done quicker than the usual time…arrow_forward
- Patel sat down with the head of public relations, the CEO, and a few Board members to weigh options. On the one hand, they knew there had already been problems along their pipeline causing health concerns a few months before. Apparently, there were substandard materials used in some of the pipeline sections that eroded which they had addressed quickly as soon as they knew there was an issue. This information was public and is one of the reasons why the media was jumping on the story. On the other hand, their pipeline was not the only one in the area. At least two other pipelines moved materials that were dangerous if released in the environment. Was the problem HFC's or another company's or maybe both or ALL? At the present moment until hazard investigation crews could investigate on- site at all the pipelines, there were more questions than answers. Patel had the accident investigation team dispatched to the area. He was debating whether he should call the other companies to jointly…arrow_forward1. Since your manager desires several business reports, justify with an explanation three (3) queries you will likely make regarding the reports' creation. For one (1) report, indicate what type of business report it is (NB! Research Types of Business Reports), outline the layout and possible content relevant to the case scenario (NB! You can show it diagrammatically if desired), and which Management level and Functional area, with justification, would be best served by this report. 2. Design diagrammatically a Form layout with a Subform that facilitates data entry for yourdatabase system. Provide a brief description of the form's purpose and functionality. 3.Identify a feature of MS Access to ensure end-users have a centralised area for accessingand completing tasks. Explain how this feature enhances usability and efficiency.arrow_forwarddo fast.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Foundations of Business (MindTap Course List)MarketingISBN:9781337386920Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...MarketingISBN:9781285193946Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Understanding Management (MindTap Course List)ManagementISBN:9781305502215Author:Richard L. Daft, Dorothy MarcicPublisher:Cengage Learning
Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...
Marketing
ISBN:9781285193946
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Understanding Management (MindTap Course List)
Management
ISBN:9781305502215
Author:Richard L. Daft, Dorothy Marcic
Publisher:Cengage Learning