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WorksheetsSOURCES OF CAPITAL
Total questions: 25
Worksheet time: 8mins
A hospital wants to open a maternity ward. They have the space, but don’t exactly have the needed funds, so they talk to their supplier. The supplier promises to fit out the maternity ward with equipment, in return for a monthly fee, in stead of the purchase price.
This is an example of:
Venture Capital
Leasing
Buisness Angel
Loan Capital
MegaBurger talks to the bank, to finance the opening of 2 new MegaBurger locations in Abu Dhabi. The bank, after deliberating if this a good move, offers MegaBurger 4 million AED at 5% interest.
This is an example of:
Debt Factoring
Business Angel
Personal Funds
Loan Capital
The owner of Jack’s Furniture Workshop, a one man company, manages to get a massive order to fit out a secondary school in Michigan. He puts $10.000 of his savings into the company so he can buy the needed raw materials, fully expecting to earn it back quickly.
This is an example of:
Subsidies
Trade Credit
Personal Funds
Share Capital
Ali Ashraf, the owner of a groundworks firm, sees his costs are on the high side. He sells his two oldest, slowest excavators, and with the money he buys one new one of the latest much faster models, expecting work faster while he saves on fuel, and thus improve his balance sheet.
This is an example of:
Retained profits
Sale of Assets
Debt Factoring
Loan Capital
Jack has a fabulous idea for an app.
A friend of his, who is also in the app business, gives him the phone number of Jakanda Operations.
Jakanda Operations is founded by a group of industry professionals who pooled their funds to invest in app concepts. He shows them the app and they decide Jakanda will participate in the development in return for 40% of the shares and an additional 20% of any profits. Jack agrees, and gets the money needed to develop the app.
This is an example of:
Retained Profits
Personal Funds
Debt Factoring
Venture Capital
What is the most likely source of finance for a small firm?
A debenture
Issuing shares
A bank loan
What is the most likely source of finance for buying property?
Mortgage
Factoring
A bank loan
What is the most likely source of finance for buying a new IT system?
Mortgage
Factoring
A bank loan
What of the following is a source of internal finance?
Selling assets
Trade credit
A bank loan
Which of the following statements about bank loans is not true?
Usually used for large amounts of money that need to be paid back over a longer time-frame
Interest rates make the loan more expensive
Easy to get
Usually cheaper than consistently using a bank overdraft
