Finance

Question 1

What is the role of the finnace department

Answer 1

Pay wages and salaries
prepare cash budgets
pay bills such as electricity

Question 2

What is a bank loan

Answer 2

Money borrowed from the bank for more than a year

Question 3

What si the advanatge of a bank loan

Answer 3

Paid back in instalments

Question 4

What si the disadvanatge of a bank loan

Answer 4

Interest has to be paid

Question 5

What is a governemnt grant

Answer 5

When money si received formt he goverenment to help set up your business

Question 6

What is the advanatge of a government grant

Answer 6

Does not have to be paid back

Question 7

What is the disadvanatge of a government grant

Answer 7

Mya have to set up in a particular area
have to meet criteria otherwise the grant may have to be repaid

Question 8

What is a mortgage

Answer 8

Obtained for purchasing property and usually paid back over 25 years

Question 9

What si the advanatge of a mortgage

Answer 9

Paid back in monthly installments

Question 10

What is the disadvanatge of a mortgage

Answer 10

Interest is charged on the amount borrowed
if installments not paid preperly can be reposessed

Question 11

What si the advanatge to a loan form friends

Answer 11

No or little inetrest is normally charged
repayment time is flexible

Question 12

What si the disadvanatges to gettinga loan from friends and fmaily

Answer 12

Cna cause disagreement
limited amounts can be borrowed

Question 13

What is a leasing

Answer 13

When you pay a monthly amount to use a product or property. You will never own the product

Question 14

What are te adavantages to a leasing

Answer 14

When the goods start to get old the lease will be over and you then start a new lease
you are not responsible for repaids

Question 15

What is the disadvanatge to a lease

Answer 15

Goods will never be yours

Question 16

What is a hire purchase

Answer 16

When goods are purchased by a deposit and the remaining amount is paid for in installments

Question 17

What si the advanatge to hire purchase

Answer 17

Receive goods immediately
goods paid for in instalments

Question 18

What are the disadvanatges to a hire purchase

Answer 18

Dont own goods until final payment i smade
deposits often required
if installmnets missed theng goods can be reclaimed

Question 19

What is a loan from princes trust

Answer 19

Provide loans to new business start ups

Question 20

What are the advanatges to a loan form princes trust

Answer 20

Low rates of interest given
advice and support are also given to new businesses

Question 21

What is the disadvanatge to a loan form princes trust

Answer 21

Conditions are often set

Question 22

What si retained profits

Answer 22

Unused profits from previous years

Question 23

What are the advanategs to retained profit

Answer 23

Does not have to be paid back
no interest rates have to be given

Question 24

What is the disadvanatge to retained profits

Answer 24

Can only be used once

Question 25

What is a bank overdraft

Answer 25

Short term source of finance given by the bank

Question 26

What are teh advanatges ot a bank overdraft

Answer 26

Suitable for short term cash fow problems
ccan take more money out theb you have in your account

Question 27

What are the disadvanatges to a bank overdraft

Answer 27

Any monies placed in your account automatically reduce your overdraft

Question 28

What is a new partner

Answer 28

When a new partner invests equity inyo a business

Question 29

What are the advanategs ot a new partner

Answer 29

No interest has to eb paid
does not have to be repaid

Question 30

What are teh disadvanatges ot a new partner

Answer 30

Profits must be shared amongst large amounts fo partners
more opinions have to eb considered