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3592632
Sources of finance
Descrição
Business studies hw- KM 11K
Sem etiquetas
business studies
finance
business
cambridge igcse
Mapa Mental por
KatnissGranger
, atualizado more than 1 year ago
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Criado por
KatnissGranger
quase 9 anos atrás
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Resumo de Recurso
Sources of finance
Internal
Retained profit
Does not have to be repaid
No interest to pay
New business won't have retained profits
Small firm profits may be too low
Keeping more profits in the business reduces payments to owners
Sale of existing assets
Makes better use of the capital tied up in the business
Does not increase the debts of the business
Takes time, amount raised is never certain until asset is sold
Not available for new businesses
Sale of inventories to reduce inventory levels
Reduces opportunity cost
Must be done carefully to avoid dissapointing cutomers, if not enough goods are kept as inventory
Owners' savings
Should be available to firm quickly
No interest is paid
Savings may be too low
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