Managing Financial Resoures and Decisions 4. Answer 13 questions.No Assignment

Managing Financial Resoures and Decisions 4. Answer 13 questions.No more than 2500 words allowed - Assignment Example effect Equity is a nonher smart option that can be used by the companion. This involves issuing shares to investors at a price determined by the company and using them to raise finance for the equipment needed by the scientistsLease is when the other company or financing organization buys the equipment and let our company use it against periodical charges known as rentals. The benefit of this option is that the company result not have to bear the full cost of equipment upfront and in case the company does not need equipment in the future it wint have to pay the rental and will not have to invest huge add together into buying the product. Hire-Purchase is like a loan to the company. The difference here is that instead of lending you the money, the confide or other financial institution buys you an asset and charges a mark-up against this assets which is amortize d by the monthly payments which includes payment of some(prenominal) principal and the mark-up. ... vidends are only paid in the profitable years, whereas in case of loans, lease and submit purchase interest has to be paid every period regardless of the fact the company unsexs a profit or loss. Hence obtaining credit loans, lease and hire purchase is burden on the companys resources as creditors have a right to sell of companys assets if they are not paid. Keeping in mind the company is young and does not have enough resources or plow back profits, it is the best option for the company to raise finance by issuing equity. However, the company should make sure that it floats as much shares in the market so as they will not mislay the control of the business or not third party investors will be able to conjure to form a holding company. 1c) There will be a antithetical set of requirements and documents that different funds providers will ask from the company before expending them a loan. Banks would ask for collateral and a business plan before deciding on whether it would lend the company or not. Bank would as well ask for projected cash flows and income statement in order to make sure that the funds that the desire is obtaining are yielding the required return in order to pay the entrust. Similarly, a bank would to a fault ask for the balance sheet to make sure that in the event of default, the company has enough assets and the bank could sell them to recover its lending. Equity investors would want a prospectus which will have to be print in the newspaper. Other than equity investors would be interested in knowing the future plans of the company, the growth dictate and name of directors and people running the company. Leasing company would need to know how long the company intends to use the assets, what will be the cash flow generation of the assets and what are the resources