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5.1 Business finance: needs and sources Flashcards | StudBud

Explore/5.1 Business finance: needs and sources

5.1 Business finance: needs and sources

10 terms·StudBud Administration·338 plays

IGCSE Business Studies #business

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Questions 10

Answers

1
What is capital expenditure?
Money spent on workers salary
Money spent on day-to-day activities
Money spent on purchasing fixed assets
Money spent on CEO's bonus
2
What is an advantage of a bank loan?
Can be arranged for different amounts and timeframes
Interest rates can be high
The bank may repossess assets
Requires some form of security
3
What does 'highly geared' mean for a company?
No debt, no equity
Low debt, high equity
High debt, low equity
medium debt, medium equity
4
What is the time frame of short term finance
Less than three months
Less than nine months
Less than one year
Less than six months
5
What is working capital needed for?
Pay workers salary
Pay for all day-to-day activities
Pay for raw materials
Pay worker bonuses
6
What type of company can sell shares?
Franchise
Partnership
Sole trader
Public limited company
7
What is NOT a factor that affects choice of finance?
Product
Current financing
Type of business
Time
8
What is an example of internal finance?
Share issue
Debentures
Retained profit
Bank loans
9
What is NOT a responsibility of the finance department?
recording all financial transations
Forecasting cash flows
Planning production
Preparing final accounts
10
What is a risk of using a venture capitalist?
They do not require security
You have to give them share ownership
They offer management advice
You must pay high interest rates