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c. cost stay the same for certain seasons like autumm, spring and summer because the growth of plants still stay the same so the demand dosent changed. but for seasons like winter , the output for plants will be lower because due to plants unable to grow in winter seasons so the  costs changed.

d. due to the increase of prices by the suppliers, the profit earned by Manuel will also decrease, because the prices needed to buy the stock/supply is higher but the selling price remain unchanged, which could lead to less profit made.

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A) Cash flow forecasting is important to Manuel because he will know the business profit end of the month and manage his existing business.
B) Supplier is interested too, because they can help the business to better manage the cash flow by encouraging people who owes the business money to pay as soon as possible.
C)  Some costs stays the same due to the weather condition and if the weather is very extreme then the demand will get low. Besides, some plants can't adapt to the weather condition in a low temperature and this will affect the business to purchase lesser raw materials of the plant.
D) When the suppliers increased 10% in July, it will lead to a higher cash outflow because expenses will increased. In addition, the prices to buy raw materials will get higher but the selling price remain the same and this may lead to make a lesser profit.
E) Manuel may increase the cash flow of the business by increasing bank loan or owners' savings. He could improve his cash flow also by paying suppliers less, if he maintain friendly, regular communication with suppliers, he will have a better chance of landing better with them. Besides, he can also offer discounts for early payments, everyone loves an incentive, and if Manuel offer customers a discount, and if they pay their bills ahead of time, this will also help him to get his cash in early and it helps his cash flow. I think he should choose to offer discounts to his customers, they would be likely to pay their bills early. Therefore, it helps his cash flow. The advantage of it is help to manage cash flow better, having cash flow forecast allow him to plan his cash better in terms of buying stocks or making payments. However, sometimes suppliers could refuse to supply and suppliers could offer lower discounts for late payments.

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cost stay the same because some expenses is fixed for example: wages or business tax on land business is still need to paid whether business is high efficiency or low 

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a. Firstly, cash flow forecasting helps people like Manuel to manage his existing business. A cashflow forecast helps Manuel to see how much his cash inflow is, and how much his cash outflow is. From the case study, it looks like Manuel has serious cash outflow problems after Winter.

This then helps Manuel, secondly, then he can keep his bank manager informed with his cash flow position, and the bank manager can look into additional financing for Manuel.

b) The bank manager will also be interested in a cash flow forecast for Gardener’s Green. The cash flow forecast will help the manager to see what are Gardener’s Green financial needs in the months where he has cash flow issues. This will allow the bank manager to have money ready to lend to Manuel from January to June, where he has a negative bank balance.

Another reason why the cash flow forecast is helpful is it maintains a long-term relationship between the lender and the borrower. As a bank manager, you want to earn interest through a long-running relationship with the borrower. By lending them money in a timely manner, it helps to sustain their business and keep it profitable. When the business profits, they are able to continue borrowing money from the bank, this in turn brings future profits in the form of interest payments to the bank.

c) Some costs stay the same each month because regardless of whether there is work to be done, the company needs to keep its workers, especially since the case study states that the experienced gardeners are hard to find. For example, in December and January, there is almost no gardening work to be done, which means the gardeners aren’t actually doing any work. However, to prevent his experienced gardeners from being poached by the competition, and to reduce disruption that comes from firing and re-hiring workers, Manuel needs to continue paying the same wages/salary to his workers.

Some costs vary each month because the amount of supplies that Manuel buys depends on the weather. For example, during the winter and autumn months, Manuel doesn’t spend money buying plants because gardening season is over. When spring comes in March, and it’s time to do gardening, Manuel will spend money on buying plants and trees.

d) When prices are raised by 10%, Manuel will have to spend $33,000 on buying trees. That means his cash outflow becomes $54,100. This in turn means that his bank balance decreases to $3,208.

e) Manuel could improve cash flow by applying for bank overdrafts during the months where he has a negative bank balance. Another way to improve cash flow is to apply for trade credit from his supplier, which will allow him to delay payments for the plants and trees purchased to a few months later, if the supplier is agreeable. If however the supplier is not agreeable, a third option Manuel can consider is using money from his personal savings to fund his business for those few months.

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a. Cash flow is important for Manuel is for to know whether the business has enough cash to run the existing business and for future purposes.
b. The bank would be interested to know the cash flow of the business, this could determine that the ability of repaying loan borrow by the business. The government also would be likely interested to know the cash flow of the business, to know whether how much actual tax revenue should be received from the business.
c. September & October has the same cost, this is because it's the monsoon season, which heavy rainfall sometimes even huge storm, this might cause some problems to some plants to die.
d. As the price product increase, cash outflow will increase, cash inflow will increase if the average sales is maintain, cash inflow might also decrease due to lesser sales being made.
e. Manuel able to increase cash flow of the business by increase bank loan or crowdfunding or owner's saving. Crowdfunding and owner's saving has no interest needed to be paid, whereas bank needed. Therefore, bank loan will be easier and convenient to be arrange.

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a)Having cash flow forecasts ia crucial for managers especially gardeners like Manuel as it could be used to predict the amount of finance he have. It will help Manuel estimate whether he has enough finance to pay his bills such as the other 50% of plants that he does not grow by himself. Furthermore, the forecast will also let Manuel know if he has an overflow of finance that could be put in better use instead. Other than these, forecasts can also be used to ensure the amount of finance required to be borrowed from banks to eliminate Manuel's business difficulties

b)Other than Manuel who needs the cash flow forecast, his suppliers is most likely to be interested in the cash flow forecast as well as they will find the need to make sure that they do not pay unnecessarily. If Manuel's suppliers pay him the finance he needs while he is unable to repay back his suppliers,  they would lose their profit rather than gaining more profit.

c) Certain costs stay the same each month because its a fixed cost. For example, the employee's wages, these business costs are fixed as the employees are all experienced gardeners that does only full-time work for Manuel's business which wages would be paid the same because the employees have the same working rank and position, unlike other business costs that varies. Therefore, the business cost of paying Manuel's employees are the same throughout the months.

d)Manuel's cash outflow during July in the forecast would increase. For example, his plants and trees purchased will cost 33000 dollars instead of 30000 dollars as his suppliers has raised the prices by 10% in July. With the 10% increase in prices for July, Manuel's bank balance would be 3108 dollars instead of 6208 dollars.

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A.a cash forecasting is important to manual to make sure the business can afford to pay suppliers and employers and applying for loan will be easier for the bank to make sure you can afford to pay back
B. It gives a clear picture to those who supply to Manuel to identify where is his business finance status
C. Some of the cost stay the same for example business tax of land or heating and water because all this doesn’t affect by seasons is a fixed cost during winter Manuel won’t spend on seeds for plants cause it won’t grow during that season

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a. cash flow forecasting is important for a manager like manuel because he can determine and calculate the money receive in and pay out in the business.

b. suppliers for manuel , so they could determine that does manuel have the capability to pay the supplier.

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a. cash flow forecast is important for Manuel because he need to keep track of the cash flow as it is inform the business to know their cash position, and for banks to know whether the business has a positive cash flow running.

b. Banks would be interested in knowing the cash flow forecast of Gardener`s green as it could it helps bank to know whether Garden`s green has the ability to repay the loan.

c. Some cost stays the same because is a fixed cost for the company, example for gardener`s green the fixed cost would be the maintenance to keep the facility updated and working.
Some cost could vary through different months, example would be the prices of products, sometimes a product would have a rise in price due to the high demand.

d. It would affect the cash flow positive state as the cash outflow would be decreased from the increase of the products that Manuel needs to purchase throughout the month.

e. Manuel could increase his businesses cash flow by leasing instead of buying a certain product that might not be very beneficial for the business`s cash inflow. Manuel could also decrease the cash outflow thru redundancies.

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a) a cash flow forecast is important for manuel beacause it can help and plan how the business will go in the future

b)Bank, the bank need the forecast to determine the amount of interest they have to charge to people who borrow money from them

c) the cost willl stay the same during winter and cold season because they will have low demands so they all will have low sales, because the plants are not suitable to grow in cold weather thats why the business will have a hard time to earn profit due to theweather condition. the cost vary each month because tthe business will have higher demands during other season like summer. so during summer the business will earn more profit because the plants can grow better than in colder weathers

d)It will be affected because the cost of the product are increased so the cast outflow will increase, this will increase the price they need to pay to their suppliers so they will earn lesser profit when the business sell the product

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a)cash flow forecasting may help managers have a good plan for business future
b)bank,bank will check business forecast before it approve bank loan to the business
c)cost stay the same because some expenses is fixed for example: wages or business tax on land business is still need to paid whether business is high or low efficiency.However,due to the whether plants cant adapt in a condition of low temperature this will affect the productivity slower so that business can purchase lesser raw material of plant.
d)it would affect the cash flow forecast due to the increase of cash out flow and profit for the year will be decrease.

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a}a cash flow is important to Manuel because it can make a better decision making  and growth planning.
b)suppliers , because suppliers need to know the person have or haven't enough to pay
c)

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A. Cash flow forecasting is important to Manuel because management forecast what is going to happen to cash flow to make sure the business has sufficient funds to survive and to further the business, for example that  make sure that in the future company will have more cash inflow than outflow.

B. Investors, because investors allocates capital with the expectation of a future financial return or to gain an advantage, from the business. They will examinate the company whether the business will grow or or fail, then they will invest to Manuel business.

C. Some cost may stay the same due to the weather condition like summer and spring. Manuel business is about plants so when the weather is good it will not affect the cost and the plants. Some of the cost might vary each month due to autumn and winter weather, because its hard to grow plants in a cold weather so it will affect the cost. Therefore, less profit earns during the winter weather.

D.

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A) a cash flow forecast is important to Manuel to run his existing business And to keep track of the outgoing of money.
B) Government,bank, or suppliers may be interest in the cash flow forecast as it’s easier to monitor the expenses of the business and taxes that needs to be payed

C) the cost varies during some months is due to the weather condition. If the weather is extreme the demand will be very low and the need to purchase products to help with his business is less. the cost stays the same is because during certain months the demand is extremely high or it remains almost the same because of the good weather and he can purchase products as normal to help with his business

D) the cash outflow will be higher if the suppliers increase it by 10% because the expenses that Manuel has to bare has increased.

E) Manuel can increase cash flow of business by taking a bank loan

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a. Cash flow forecasting is important to Manuel because it could affect the business's ability to continue to run or to pay bills.

b. Suppliers, as they would like to know if the business could pay back the available debt or have any possibility to buy supply from them.(whether it is profit or loss if continue to supply goods to the business)

c.Some cost stays the same like wages since the workers are still working for the business.In contrast, some cost varies for example the plants especially in winter because the business rarely have any sales during that season, so the business don't purchases any plants or trees.

d.The cash flow forecast for the business would be affected. Since the price raises by 3000, it means the total cash outflow would increases by 3000 as well as the bank balance would be lesser and lesser too.

e.To improve the cash flow, Manuel could increasing the bank loans. Bank would lent more cash into the business, but, the business need to pay more bank interest which will reduce the profits. Secondly, he could delay the payment to suppliers. So that the cash outflow could be decrease for a short time. However, this could effect the relationship between the business and the supplier. Last but not least, Manuel could cancel the purchases of the assets for the moment to let the cash outflow decreases, but it might cause the efficiency of the output if the asset is use for the business.

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a) a cash flow forecast is important for manuel because he will be able to keep tract of the money's outflow and find ways to improve it. it also helps banks to have confidence in loaning money to people who has good cash flow forecast because they are most likey to repay.

b)besides manuel his suppliers may also be interested in his cash flow forecast ,this will allow the supplier to know where there a not this person is able to pay them on time or be able to pay interest if their payment is late.

c) some cost may stay the same like paying salaries which is usually a fixed cost unless promoted. manuel has had only 6 full-time workers for over 4 years. some of manuel's cost may vary each month due to the fact that he business 's revenue changes throughout the year but the cost is still there and he may need to pay suppliers but do not have the money at hand so he pushes them top the next month increasing the cost.

d) gardener's green supplier is plans to increase their plants and trees by 10 cent by July so this wouldn't affect their earlier cash flow forecast given, since the forecast only shows till July only july will be affected changing the amount from 30,000 to 33,000.

e) ways to improve cash flow:
- get a bank loan
-delay payment to supplier
-pay immediately to supplier to receive discount

1) getting a bank loan will allow Gardener's green to get money quick which will improve cash flow, but they will have to pay a loan.

2) delaying payment to supplier will give time to the business to sort out their finance while still have the supply to work, but this will give your supplier doubt that you'll pay back soon or at all so they might not want to supply the business anymore.

3)paying upfront and before a deadline to receive discount will help lower the cost of the actual goods reducing cash outflow but the business may not have the money right now to do so.

Maneul is able to choose option 3) since it will benefit the business the most and will be able to pay for it since the closing bank balance during July was recently positive.

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a) Cash flow forecasting is important to Manuel because it is necessary to know a firm profit at the end of the month. With forecasting, he can know how much his cash inflow and outflow is to ensure businesses has enough sufficient funds to pay all the expenses and advance warning if there are problems like money shortages in the future.

b) The bank manager is likely to be interested in a cash flow forecast for Gardener's Green as it will help them to know how much money they can borrow to the business. Cash flow forecast allows bank managers to be aware if the firm need any financial needs in a specific month so they can prepare the money beforehand to borrow when they have cash flow problems.

c) Some costs stay the same, like heating & water, because the business mostly operate during spring, summer and autumn and not on winter. So there is no need for Manuel to use heating as it is mostly warm. Costs may vary due to weather conditions. There is also no reason for firm to purchase plants & trees and to use water during winter as there will be less demand.

d) If Manuel supplier of plants and trees raise prices, the cash flow forecast will be affected because the cash outflow for July will increase. So instead of paying $30000, he will need to pay $33000 which will reduce his bank balance.

e) Manuel can improve the cash flow of his business by using his own savings. He can put more of his savings into his business and it should be available to the firm quickly, and no interest is paid. Although there may be no effect if the amount of savings put into the business are too low. Another way is bank loan. By borrowing money from bank, Manuel can have the money quickly as well and they may offer low rates of interest if he borrow a large sum. However, a bank loan will have to be repaid eventually and interest must be paid. Lastly, he can use trade credit. By delaying paying to its suppliers, it leaves the business in a better cash position and it is almost a interest-free loan to the business for the length of time that payment is delayed for. Although the supplier may refuse to give discounts or even refuse to supply any more goods if payment is not made quickly.

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a) It is important because it allows Manuel to check if the business have enough cash available, receive advanced warning of cash shortages or even make sure that the business can afford to pay suppliers and employees.
b) bank manager, because the bank will only help you if they trust you and being on top of your numbers will earn their trust. So the cash flow forecast will help them decide in order to approve the loan whether your business is credible or not.
c) Some costs might change because it is a variable cost so the price changes with the changes in the quantity demanded. j

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a. Support loan application as shows that they have the ability to repay

b. Government, government can measure the amount of tax Manuel are able to pay

c. Cost stays the same during autumn, spring and summer because demand for Gardener's Green remain almost the same. However, during the winters or nearing winter, due to weather condition, its harder for plant to grow therefore Manuel wouldn't purchase anything because plants wouldn't grow during the winter, so cost is differently from other months.

d. when supplier charge 10% higher will lead to a higher cash outflow because expenses has been increase. Furthermore, net cash flow and closing bank balance will decrease.

e. Manuel can negotiate with plants and trees supplier to get a cheaper price or get an instalment and pay back during the empty 6 months. This is reduce the cash outflow of Garden Green because Manuel can pay back later. However, instalment may charge interest, therefore cost for Garden Green will be higher. Second method Manuel can use is offering cash discount to debtor, this will ensure Manuel is able to cover his cash outflow from late payment. But trade receivable may find other supplier that gives longer period of time to pay instead of Manuel. This is can reduce cash inflow of Garden Green. Third method Manuel can use is

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a.33000
b.22500-12000=10500
c. 50% of the goods were sold in cash, and the other 50% were paid in credits

# data[].attributes.body
a. 45000-12000=33000
b. cash inflow = 45000x50
= 225000
cash outflow = 120000
net cash flow =225000-12000
=10500
c.

# data[].attributes.body
A. 45000 - 12000 = 33000
B. 45000*50% = 22500 - 12000 = 10500
C. the sales of good is 50% cash and 50% credit.

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Chang
A)45000-12000=33000

# data[].attributes.body
a.45000-12000=33000
b.45000*50%=22500
22500-12000=10500
c.50% of goods are sold in cash and others are paid in credit terms

# data[].attributes.body
A)45000 - 12000 = 33000
B)45000 x 50% = 22500
22500-12000 = 10500
C)50% of goods are sold in cash and another 50% was paid in credit terms

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a.33000
b.22500
c.

# data[].attributes.body
A) 45000-12000=33000
B) 45000x50% =22500 - 12000 = 10500
C) only 50% of goods are sold in cash and others are paid in credit terms

# data[].attributes.body
a) 45000-12000
=33000
b) 45000*50%
=22500  ( cash inflow)
cash outflow: 12000
Net cash flow: 22500-1200
=10500
c)

# data[].attributes.body
a.33000
b.22500-12000=10500
c. no why

# data[].attributes.body
A)45000-12000=33000
b)45000*50%=22500
22500-12000=10500
c)50%of good are sold in cash others was paid in credit terms

# data[].attributes.body
a)45000-12000
=33000
b)(45000x50%)-12000
=10500
c)

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a. gp= 45000 - 12000 =      33000
b.

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Gross profit: 45000-12000=33000
Cash held:45000*50%= 22500
[22500-12000=10500]
The answers are different because sales of good was paid 50% cash and another 50% on one month credit basis

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a.45000-12000=33000
b.45000*50%=22500
22500-12000=10500

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A) Gross profit = $45000 - $12000 = $33000
B) Net cash flow = Cash inflow - cash outflow
= 45000 x 50% = 22500
= $22500 - $120000
= $10500
C) This is because even though the business was able to sold a total of $45000 of goods, the business has only receive half of the payment which is in cash and another half of it is bought in credit by the customers

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Activity 23.2
a) Gross Profit = 45000 - 12000
= 33000
b) Cash held = cash inflow - cash outflow
Cash inflow = 45000 x 50% = 22500
Cash outflow = 12000
22500 - 12000 = 10500
c) The answer to a and b is different because cash flow can only be calculated once the business received it, while gross profit calculate both the credit and the amount firm received.

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a)Gross profit:
45000-12000
=33000
Answer:33000

b)Cash held:
50/100x45000=22500
22500-12000=10500
Answer:10500

c)Answer in a and b are both different even when the business sold the goods worth of 45000 dollars because the business only received 50 percent of the payment in cash whereas the rest are still in credit.

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A. 33,000
B.22,500 , 10,500
C. 50% of the goods sold were in cash while the other were on credit in A they asked for the gross profit while B asked to assume if there wasn't any cash goods sold

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a. Gross profit = 45000 - 12000
= 33000
b.  cash inflow = 45000 x 50/100
= 22500
cash outflow = 12000
cash held = 22500 - 12000
= 10500
c. this is because gross profit includes credit sales and net cash flow doesn't include credit sales. So the 50% are not calculated in net cash flow

# data[].attributes.body
a. Gross profit
= 45000 - 12000                    =33000

b. cash held
cash inflow= (45000*50%)
=22500
cash outflow =12000
net cash flow =22500 - 12000
=10500

c. The both answers are different because gross profit calculates the credit sales but the cash flow only calculate the amount which the business actually received.

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a. bank loan and trade credit.

b. issue of shares and

c. Company A using bank loan would be the most suitable source of finance for them because its way quicker and secured to borrow from the bank, in additional that they wanted the shop to be decorated immediately.
On the other hand for B, issue of shares will be the best option for them because Company B is planning to expand their restaurant by taking over other restaurant so large finance is needed,  the problem cab ve solved  by selling shares to shareholders.

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You're supposed to suggest a few sourceS for (a) and (b). No need to explain.

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You're supposed to suggest a few sourceS for (a) and (b)

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You're supposed to suggest a few sourceS for (a) and (b)

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Activity 22.7
a) Since company A wants to decorate its shop now, it will be more suitable for them to choose trade credit or bank loan as they are in shortages of cash.

b) Company B could use issue of shares to quickly gain some cash to pay off their bank loan, or they could use hire purchase.

c) For company A, it is more suitable for them to use bank loan as the source of finance. This is because by borrowing from bank, they will be able to have immediate cash, and since they need a large sum of money, I don't think that trade credit is suitable for them as it might ruin their relationship with supplier.

As for company B, it will be better if they choose issue of shares. Unlike hire purchase, there is no interest needed to be paid, which will be helpful as the firm already has a large bank loan.

d) Before choosing a source of finance, company A should know if they have any loan beforehand as this would help to prevent any further debt.
As for company B, they should know if they are capable of handling all the businesses as they already own 3 restaurants.  If it's too much, they might lose control of the business.

# data[].attributes.body
a. bank loan because they want to their shop to be deorated now, so borrowing money from bank will be more efficient.

b.

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Activity 22.7
a)I would advise Company A to use either bank loan or trade credit as their source of finance as these are more suitable to their current situation.

b)I would advise Company B to use either debentures or issue of shares as their source of finance as these are more suitable to their current situation.

c)For company A,  Trade credit is the best source of finance to use seems finance is needed immediately and with the current situation the business is in now,, issue of shares is not advisable. Besides, trade credit  is almost an interest-free loan. whereas bank loan has an interest charge. Therefore, trade credit is a wiser choice.
For company B,  issue of shares is most suited for the business's current situation because the business wants to take over another restaurant company. and this method allows the takeover of other businesses.

d)For company A, I would prefer having information of the business's status and size of the business as it is not stated in the text and these information would be required as well in order for me to provide a better advise on the source of finance.
For company B,  it is better to inform me of the risks and gearing of the business as this could predict on whether the business would fail or otherwise. With this information, I would be able to advise properly without any missing factors.

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Activity 22.7
a) I advise Company A to use bank overdraft as their source of finance

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22.7

a. overdraft, sell of unwanted asset

b. sell of unwanted asset, sell shares

C.

Company A -

overdraft, because overdraft can get money easily

Company B -

sell unwanted assets since company B have 3 restaurant and have high debt, selling unwanted asset can clear up space and gain extra finance.

d. Company A could provide its financial position, company B could

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dear val, since you are unsure on the source of finance available to you . i will help to explain and recommend the types of source of finance most appropriate to you.
1. i would recommend government grants or subsidy , it will help reduce your cost of production , there isn't any interest included and you don't need to repay anyone. but grants or subsidy given by government may not fully cover the cost of production making it useless.

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Q2)
1. Leasing
2. Hire purchase
3.debeture
4.retained profit

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Q2.
A) Leasing because she can just use the van at times she wants to without having to own it.
B) hire purchases because since val doesn't have the full amount, she can pay on a monthly basis.
C) Bank loan as she doesn't want the person lending her the money to have ownership over her business.
D)  Debt factors as Val's money is mostly bad debts and she's in need of money, Debt factors could give her 90% of the bad debts amount and collect it back in full amount from those who owe Val the money.
Q3.

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1. leasing
2. Hire purchase
3. debenture
4. overdraft

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Question 2
1.leasing
2.hire purchase
3debenture
4overdraft

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Q2)
A)leasing,because  she doesn't want the business to own the van , leasing can help her to use a new van in short period of time.

B)hire purch
c)Debenture
d)overdraft

Q3)

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Question 2 (Task 2)
a)Leasing. By having this method as a source of finance, Val do not have to own the van and can rent instead for his business whenever he wanted to.

b)Hire Purchase. Stuart can pay monthly with this source of finance method as it will allow his business to buy a fixed asset over a long period of time with monthly payments and an interest charge.

c)Debentures. This source of finance method is a long term loan issued by limited companies which is used by companies to borrow money at a fixed rate of interest and maintain ownership as well. Val could use this method as he does not want to lose ownership of his business.

d)Factoring debts. With this source of finance, it means that Val would have someone else to handle the debts that others owe to him and immediate cash is made available to the business as Val would be paid.

Question 3 (Task 3)

Dear Val,

How are you? I'm writing to recommend you a suitable source of finance. Firstly, one of the source of finance that I would recommend to you is Trade Credit. Trade credit is when a business delays paying its suppliers. If you use this method, you would have more time to be in better cash position. Other than that, Retained profit is also one of my recommendations. When using this method, it means that profit is kept in the business after the owners have taken their share of profits. This also means that retained profit does not have to be repaid, it is unlike a loan where there are interest charge.

Both Trade credit and Retained profit are source of finance. Trade credit is an external finance method whereas retained profit is an internal finance method. Whereby an internal finance method is obtained within the business itself while an external finance is obtained from sources outside of and separate from the business.

Trade credit is a short term source of finance where working capital is provided to the business for day-to-day operations. In contrast, Retained profit is a long-term source of finance which is available for the business for more than a year to purchase long-term fixed assets, expand the business or to finance a takeover of another business.

Trade credit is when a business delays paying its suppliers which leaves the business in a better cash position. It is like an interest-free loan to the business for the length of time that payment is delayed for. However, the supplier may refuse to give discounts or even refuse to supply any more goods if payment is not made quickly. Therefore, I would recommend you to use retained profit as your source of finance method as it is a long-term finance which is available for more than a year. With this source of finance, you would be able to purchase long-term fixed assets such as the machinery you had wanted to purchase for your business. Besides, retained profit does not have to be repaid, it is different from loans that have interest charges. In conclusion, I would recommend retained profit as your source of finance for your business.

Yours Sincerely,
11S2 Gals

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question 2.
a) hire purchase, since val doesn't want to own the van and only wants to use it for a short period of time she can use hire purchase to pay for the times she will use the van.
b)leasing,
c)bank loan
d)debt collector, since val is in need of the money to buy stocks , val can get someone to collect her trade receivables in exchange for less than 100% of the money to be given upfront .

question 3

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Teacher's on the spot answer (I no look at answer sheet ya

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Teacher's on the spot answer (I no look at answer sheet ya

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1. Banks are interested in earning interest from the loans that they extend to customers. From the case study, Parveen was only able/interested in borrowing $70. Banks won't be able to make a lot of interest from such a small loan.
Furthermore, Parveen comes from a poor backgorund. From the passage we can see that she has nine children, and needs her neighbors help to feed the children. With this kind of poverty, she will not have collateral to offer up to the bank to secure her loan.

2. Very briefly, Parveen has personally benefited because now she has opened more businesses and is more financially independent, for example she doesn't need her neighbors help to feed her children anymore. He children are now also able to go to high school and college to get a good education, and perhaps improve their prospects for life in the future. If this micro-financing activity expands to the entire country, then many people like Parveen can be lifted out of poverty and enabled to be financially independent.

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a)Traditional banks would not lend Parveen money for her business because the size of the loans required by them meant that the bank could not gain profit from the loans and poorer groups in society often have no asset for security for loans which means banks are likely to hold risks by lending without any form of security. For example, if the bank provide loans for her, she would not be able to return finance as she is poor. Therefore, it would be risky for the bank to provide loans for them.

b)It has helped Parveen to open as well as start a business for herself which took off great, allowing her to open more business. Furthermore, her children are also getting proper education now.

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1. she was poor , she used  her money to feed her 9 children. Because of she couldn't make enough money, therefore the bank couldn't gain any profits from the loan she borrowed, so she cant borrow money from the bank.
2.micro-finance provides financial services,  because of  micro finance, Parveen borrowed some money from it to start her business. Once she had successfully borrowed money from the micro finance, she started up new business and to pay back the loan. That is how micro finance changed her life from poverty to stable income .

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1. because she was considered poor and did not have a job, all the money she had borrow was put into buying food into her children. So she would have no money left to start a business

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1.Because she was poor and no job. she have not enough money to buy food  for her 9 children, she need to ask neighbours for food to help feed them all.
2.

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1. Because she was poor and even have no money to feed her 9 children. Furthermore she doesn't have asset to put up as collateral when she want to borrow money from the bank, so the bank wouldn't borrow her as the bank is confidence that she will pay back the loan.
2. Micro-financing has given the benefit to Parveen by lending her small amount of money easily, unlike the bank which will only lend large sum of money and require assurance. Parveen was able to start up a business with lending $70 from Kashf Foundation. Since she started up a jewellery making shop, she is able to finance her 9 children and doesn't have to borrow money from her neighbour. Micro finance can also benefit the country because it help poor people to start up small business. In a long run, there will be more businesses therefore reducing unemployment because businesses require labour to product output.

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1. because she was considered poor and did not have a job, all the money she had borrow was put into buying food  for her children. she wouldn't have much asset for the bank to take if she couldn't repay them.
2.micro-finance helped parveen to start her business allowing her to get herself out from being poor. micro-finance can help people who are poor and in financial need and help small business to grow since commercial bank wouldnt lend them money.

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1.mortgage
2.debenture
3.hire purchase
4.overdraft
5.bank loan
6.leasing
7.retained profits
8.share issue
9.crowdfunding

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1.  mortgage
2. debentures
3. hire purchase
4. overdraft
5.bank loan
6.leasing
7.retained profit
8.share issue
9.crowdfunding

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1. Mortgage
2. Debentures
3. Hire purchases
4. Overdraft
5. Bank loan
6. Leasing
7. Retained profit
8. Share issue
9. Crowdfunding

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1. Mortgage
2. Debentures
3. Hire Purchase
4. Overdraft
5. Bank Loan
6. Leasing
7. Retained profit
8. Share issue
9. Crowdfunding

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1.Mortgage
2.Debentures
3.Hire Purchases
4.Overdraft
5.bank Loan
6.Leasing
7.Retained Profit
8.Share Issue
9.Crowdfunding

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1.Mortgage
2.Debenture
3.Hire purchase
4.overdraft
5.Bank loan
6.leasing
7.retained profit
8.Share issue
9.crowdfunding

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1. Mortgage
2. Debenture
3. Hire purchase
4.Overdraft
5. Bank loan
6. Leasing
7. Retained profits
8. Share issue
9. Crowdfunding

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1. Mortgage
2. Debenture
3. Hire purchase
4. Overdraft
5. Bank loan
6. Leasing
7. Retained profit
8. Share issue
9. Crowdfunding

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a) Because it is a new business so will not have retained profit.
b) His savings would be important as he need money to start up the business.
c) He cannot sell inventories since the taxi business is a service sector, they don't have any inventories to sell.

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a) Because the taxi business is just starting, it doesn't have a retained profit.

b)Because he is just starting the taxi business, he needs to finance everything.So using his own savings is better than taking loans from banks or outsiders, because if then they have to pay interest.

c)Taxi business is one of the major business, therefore selling inventories may not give back sufficient amount to finance the business.

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Activity 22.3
a) Retained profit is not a possible source of finance to start with as it is the profit kept in the business after owners have taken their share of the profits.

b) His savings will be likely to be an important source of funds as he will need it at the beginning to start off his business.

c)Selling off inventories is never likely to be an available source of finance to his taxi business as no matter how much inventory he sells, it will not be enough to support his taxi business, the taxi business is meant to give service to customers.

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1)because if the business just started they will not have any profit,therefore not money to put back into the business.
2)Yes,Paul wanted to start the business,he is the owner of the business,therefore he needs to finance the expansion needed so i think saving is important for his business future use
3)this is because Paul is providing service in the societies,so he can't sell any inventories,unless the machinery is old,such as old taxi,old office fixtures and fittings

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1. Because newly start business wouldn't have enough leftover finance
2. Since Paul is the owner, he will be able to finance for his taxi business, it will also be efficient as business does not need to pay interest in return
3. Amount you get back from selling the inventories might not be enough to finance his taxi business and new taxi business wouldn't have much asset to sell as they have shortage in capital

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a)Paul should avoid because many small firms profits might be too low to finance the expansion needed.
b)Paul savings are likely to be an important source of funds because no interest is paid  and his savings should be available to the firm quickly.
c) As a taxi business it may not be any relevant inventories for sale. We would assume that all his inventories are related to driving of the taxi and managing the office if there is one.
If he manages to sell any of his inventories, he may not yield enough amount to finance his business.

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a) retained profits is not suitable for Paul business because is a startup for his taxi business , he doesn't have the profits and cash flow to start with.
b) Paul saving will be likely to be important because he need to invest his own capital at first in order to make profit.
c)Selling off inventory in taxi business is not a good idea because even Paul sell off his inventories , he'll only get a minimal amount of finance from it which won't be enough to be consider as a source of income

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each group creates one post.
NOT every person create one post.
Decide which person in the group will type the answer.
Use the group name I gave you in Zoom Breakout Room.

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MT furniture should open their business in a overseas market as they have a larger market, Moreover they have have more opportunity to export their product to other countries. Futhermore, the overseas government would give a capital investment for the company, therefore they have the ability to train the lack of skilled workers from Site B