Question

Which of the following are the key factors for choosing the type of financing? Anders
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Answer 1

Explanation:

Cost

The cost of raising funds from different sources are different. A wise finance manager opt for the cheapest source of finance.

Cash Flow Position of the Company.

Answer 2

Answer:

The key factors for choosing the type of financing are:

• Availability of funds
• Assets of the venture
• Prevailing interest rates

Explanation:

1. Availability of funds: Funds availability refers to when you can access money that you’ve deposited with your bank to pay bills, make purchases and cover everyday expenses. With some exceptions, money that you add to your checking account or savings account isn’t always available to use right away.
2. Assets of the venture: Venture Funding is an important source of financingthe new startups with new ideas. Venture funding supports startups and new ideas that otherwise would have gone to waste. It helps the growth of companies that have huge potential and revenue-generating ability.
3. Prevailing interest rates:The prevailing interest rate affects what earnings banks and other financial institutions will offer on savings accounts and certificates of deposit. If rates are high on loans, savings rates typically will also rise accordingly. Prevailing interest rates can have a significant effect on the bond market, especially on short-term bonds.