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WorksheetsFinance sources (v.2) Edexcel business A level
Total questions: 15
Worksheet time: 5mins
A business would choose a bank loan :
if interest rates are high
if they want equity investors
if they have a bad credit history
if they want long term finance
A firm wants an expensive photocopier but does not want to own it :
take out a loan
take out a leasing contract
take out an overdraft
sell shares
Share capital as a source of finance is an option for :
sole traders
partnerships
companies
charities
Limited liability means that investors are
more likely to invest
less likely to invest
putting personal possessions at risk
A short-term source of finance to overcome cash shortage :
mortgage
5 year loan
overdraft
venture capital
Finance to help a firm buy stock from supplier
loan
trade credit
leasing
grant
Sometimes called Risk Capital
bank loan
vulture capital
adventure capital
venture capital
What can a PLC do that an LTD cannot do ?
sell shares
lease equipment
sell shares to general public
take a bank loan
An individual that invests in a company and advises it
partner
business angel
venture capital
peer-peer lender
Dividends are payable :
by sole traders
by shareholders
to shareholders every year
to shareholders every year if profits are made
Sale of assets .....
is an external source of finance
is an internal source of finance
is likely to be an option in year 1
Using retained profits as a source of finance ....
increases dividends to shareholders
is available to a start-up business
decreases dividends to shareholders
Trade credit from suppliers ......
is always offered to new businesses
is usually for 30 or 60 days
the same as leasing
is used to buy a factory
For business studies we assume that bank loans have :
a fixed interest rate
a variable interest rate
Which loan is likely to have lower monthly repayments ? :
a) £5000 loan over 5 years at 3% interest
b) £5000 loan over 10 years at 3% interest
b
a
