1 - Internal finance Flashcards
1
Q
reatained profit
A
profit sourced from within the business, usuallly from sales ect
2
Q
benefits of retained profit
A
doesnt incur interest
3
Q
negatives of retained profit
A
shareholders may be upset, and prefer to recieve excess cash in dividends
4
Q
sale of assets
A
selling assets such as machinery, locations ect
5
Q
benefits of selling assets
A
frees up value in unwanted assets to be investes in other areas
6
Q
negatives of selling assets
A
losing th benefit of the asset, foe example not being able to use a car that is sold
7
Q
owner’s capital
A
capital that the owner may invest themselves
8
Q
benefits of owners capital
A
no interest
9
Q
negatives of owners capital
A
may loose their own money
10
Q
factors affecting choices of finance
A
risk
cost (interest rates ect)
flexibility
