Question

Fixed Capital Requirements.
Working Capital Requirements.

Classification Of Sources Of Funds
Owner's Funds Borrowed Funds Ownership basis

Define Retained Earnings With Example.
Merits
Demerits

Define Trade credit With Example.
Merits
Demerits

Define Public deposits With Example.
Merits
Demerits

Define Commercial paper (CP) With Example.
Merits
Demerits
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Answer 1

Answer:

1) It is quick and cost effective way of raising working capital. 2) Best way to the company to take the advantage of short term interest fluctuations in the market. 3) It provides the exit option to the investors to quit the investment. 4) They are cheaper than a bank loan.

What Is Commercial Paper?

Commercial paper   is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities. Maturities on commercial paper typically last several days, and rarely range longer than 270 days.