Managing Financial Resources And Decisions

Assignment on- Outcome: 1

Prepared forMr. Md. Sarowar Khaled Adjunct Faculty, School of Business, BAC Prepared byMd. Ariful Islam HND in Business, Intake-3 ID: 01-02-10122 Submission Date: 22-08-2011

BAC

2. Implications of different sources

(a).Promoters initial capital may be invested as a loan or as equity. If it is a loan: If the promoter capital is invested as a loan it will be a debt capital to the company. It has to be returned to the promoters within the time whether there is any profit or not. If it is equity: If the capital is invested as equity it will be called the owners equity. If there is a profit it can be returned to the owners otherwise it can not be. (b) Flag Three Securities LTD. If considers the bonds then its a fixed income security process. And it will be returned to the lender after the required tie. If they goes for the ordinary share then can earn the capital by calling the primary share on 100TK face value of each share. (c) Capital Market: it is actually called as the share market of the country. The company can call the primary share of 100-TK face value of the each share and collect the cash capital from there. Term Loan: Term loan is thing that can be taken from the bank or any other financial institute and the returning process of this type of loans are in several terms. (d) Secured Borrowing: Borrowing the cash capital from the source in a secured way that it will be returned at time is called the secured borrowing. Unsecured Borrowing: It is the process in which the capital is borrowed without any documents or the terms are not favorable of returning it to the lender.

3. Select appropriate sources of finance for a business project Scenario-1 The firm can go fore ordinary share or may be able to take the bank loan. Because they are deciding for TK.25 million as the annual turnover. So ordinary share would be the best option they should pick. Scenario-2 The plcs estimated cost of the new planning TK.45 million. They should go for common stock or the bank loan. Because it is a big amount covers up. Scenario-4 The UK plc is planning for about the cost of 4.5 million. They can go for the bonds or they can take the option of ordinary share. Scenario-5 The partners can gather their funds by taking bank loan or they can take financial help from their personal sources like friends and family. Scenario-6 The village shop can raise their finance by taking some bank loans or they can collect money from the villagers or they can collect it from any other finance institutions. Scenario-7 The organization can arrange the money of their new software package from the bank loan. The cost is not that much so they can arrange it from the bank loan.