Assume that James Park and Eric Friedman of Fitbit plan on expanding their business to accommodate more product lines. They are considering financing expansion in one of two ways: (1) contributing more of their own funds to the business or (2) borrowing the funds from a bank. Identify at least two issues that James and Eric should consider when trying to decide on the method forfinancing their expansion.
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Assume that James Park and Eric Friedman of Fitbit plan on expanding their business to accommodate more product lines. They are considering financing expansion in one of two ways: (1) contributing more of their own funds to the business or (2) borrowing the funds from a bank. Identify at least two issues that James and Eric should consider when trying to decide on the method for
financing their expansion.
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- Assume that James Park and Eric Friedman of Fitbit plan on expanding their business to accommodate more product lines. They are considering financing expansion in one of two ways: (1) contributing more of their own funds to the business or (2) borrowing the funds from a bank. Required Identify at least two issues that James and Eric should consider when trying to decide on the method for financing their expansion.Atlantis Inc. is in need for funds for its expansion plan. It approaches Uni Bank with its business plan for financial assistance. What is this source of funding known as?If you had $100,000 available for investing, which of these companies would you choose to invest with? Support your answer with analysis of free cash flow, based on the data provided, and include in your decision whatever other reasoning you chose to utilize.
- Larissa Warren and Dan Ervin have been discussing the future of East Coast Yachts. The companyhas been experiencing fast growth, and the future looks like clear sailing. However, the fast growthmeans that the company’s growth can no longer be funded by internal sources, so Larissa and Dan havedecided the time is right to take the company public. To this end, they have entered into discussionswith the investment bank of Crowe & Mallard. The company has a working relationship with Robin Perry,the underwriter who assisted with the company’s previous bond offering. Crowe & Mallard have helpednumerous small companies in the IPO process, so Larissa and Dan feel confident with this choice.Robin begins by telling Larissa and Dan about the process. Although Crowe & Mallard charged anunderwriter fee of 4 percent on the bond offering, the underwriter fee is 7 percent on all initial stockofferings of the size of East Coast Yachts’ initial offering. Robin tells Larissa and Dan that the…Finance professionals make decisions that fall into three distinctive areas: corporate finance, capital markets, and investments. Below is a set of decisions made by finance professionals. Categorize the decisions according to the area of finance to which they belong. Decision Corporate Finance Capital Markets Investments Ethan must make a decision on how to cut costs so that his company can generate extra cash flow to acquire assets. Radford works for an investment bank and makes decisions about the sale of new common stock by ABCL Inc. Aakash works for a financial advising firm. He must create a financial plan and come up with a list of securities in which his client can invest. Aakash must make decisions regarding the investments that he should recommend to his clients to include in their portfolio.A. Determine the decision nature of each of the following issues: What are the least expensive sources of funds for the firm? A large retailer such as LuLu Hypermarket, deciding whether to open another store? Will we purchase on credit or will we borrow in the short term and pay cash? The decision to develop and market a new software by a company such as Microsoft. Choosing among lenders and among loan types?
- 1. Glenn is weighing whether to buy an equipment for his new computer shop, and weighs the pros and cons, he does his analysis using the net present value method. What do you call the process that he is making? A. Capital Budgeting B. Investment Analysis C. Financial Decision Making 2. What concept of bias that practices guarding some money cautiously when we mentally categorize it for a house, but spend it liberally when it's "fun money". A. Mental accounting B. Outcome Bias C. Overconfidence bias 3. What type of bias relies too heavily on one piece of information in making a final decision? A. Availability Heuristic Bias B. Bandwagon Effect C. Anchoring BiasRead the article. Whats the author point of view? How does this relate to financing a business? What would be a solution for this pronblem? The role of finance is undergoing a significant shift. As businesses strive for growth and competitiveness in an increasingly complex and dynamic market, finance leaders are being challenged to add more value beyond their traditional responsibilities.Insights from Microsoft’s Economic Guardians of the Future report show finance teams are going through an evolution and must strike the right balance between strategic innovation and protecting the long-term health of their company. Eighty percent of finance leaders believe that they and their teams are being challenged more than ever to add value beyond their standard roles and responsibilities. This shift has been driven in part by the uncertain economic climate, marked by factors such as inflation, recession, and international conflicts.Finance teams are being asked to provide insight into the…Aquafin LLC is a company formed in the year 2000 and listed in the Muscat Securities Exchange. The company has primarily engaged in the manufacture of water purifiers and its accessories. Recently, the company has expanded its operation by taking a forward integration move. Adding on, the company is planning to start two more factories in Oman and the Senior manager (finance) Mr. Miyan Ahmed has asked to identify the possible sources of funds for the same. As per the estimate submitted by SMA team (Strategic Management Accounting team), the company requires 100,000 OMR to proceed with the proposed investments. By considering facts and figures given below you are asked to evaluate the Proposed Capital structure by answering the given questions. Abstract of the Capital structure developed by Mr. Miyan Ahmed, ACCA Source of capital Amount in OMR Equity share capital( 5000 shares at OMR 10 each) 50,000 Reserve and surplus 10,0000 12% preference shares 20,000…
- Aquafin LLC is a company formed in the year 2000 and listed in the Muscat Securities Exchange. The company has primarily engaged in the manufacture of water purifiers and its accessories. Recently, the company has expanded its operation by taking a forward integration move. Adding on, the company is planning to start two more factories in Oman and the Senior manager (finance) Mr. Miyan Ahmed has asked to identify the possible sources of funds for the same. As per the estimate submitted by SMA team (Strategic Management Accounting team), the company requires 100,000 OMR to proceed with the proposed investments. By considering facts and figures given below you are asked to evaluate the Proposed Capital structure by answering the given questions. Abstract of the Capital structure developed by Mr. Miyan Ahmed, ACCA Source of capital Amount in OMR Equity share capital( 5000 shares at OMR 10 each) 50,000 Reserve and surplus 10,0000 12% preference shares 20,000 9…COFFEE CALL SEEKS FUNDS FOR EXPANSION Coffee Call is a small, independent coffee shop. It is run by two sisters, Georgina and Caroline Evers-Swindell. They are keen to increase sales by using the shop space more effectively and install three new tables. This will, however, require a significant investment and the sisters have approached the bank with a business plan for the expansion with the aim of securing loan finance. The sisters have been approached by a venture capitalist who is willing to fund the expansion in return for a 20% stake in Coffee Call. The sisters are concerned to keep the liquidity of the business secure during the expansion.The following cash flow data have been produced by Coffee Call’s accountant for the period January to June:- Sales for the first three months of the year will be $20,000, rising to $40,000 in the following three months once Coffee Call has installed the extra seating. - Material costs are 50% of sales and are paid each month. -…Which of the following sources of entrepreneurial financing are available to ventures that have already started to conduct business and generate sales? bank financingventure capitalpublic financingall of these
