Тема: Sources of business financing at a stage of life cycle . Учебная работа № 366403

Учебная работа № 366403. Тема: Sources of business financing at a stage of life cycle

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Sources of finance

…….sion

1. What is money, in addition to
being a means of exchange?

2. What, in economic theory, is
considered to be “labour”? 42

3. Why is mother’s work
considered to be not “labour”?

4. What does the economist
measure?

5. What two words are used to
describe the money standard?

6. What two words are used to
suggest different standards from the money standard?

7. What is labour (in the
economic sense) not concerned with?

8.
What term is used to describe a person engaged in his own private
business?

9. What does the employer receive
instead of wages? 10. How is the reward of private enterprise called?

3.
Введення нової лексики і виконання
лексичних вправ.

For the
well-established firm, the most obvious source
of finance is its own profits.
Instead of paying out all its
profits to its shareholders, the firm can
retain some within the business. Using retained profits in the
business is described as «ploughing back
the profits». It is an important source of
finance for the larger firm.

In the case of
a very small firm, the necessary money will
be provided by the proprietor and his family
and friends with, perhaps, a loan from the local
bank.

Loans
can be short-term
and long-term
ones. Short-term
loans are usually repayable within three years.
Many such loans are for periods of one year or
less. The sources of loans are as follows:

overdrafts

bills of exchange

trade credits

hire purchases

leasing.

A bank
overdraft is the most widely used type
of short-term finance. The bank allows the
com­pany to overdraw its account by
some agreed amount. Interest is charged by
the bank only on the amount overdrawn. It is one of the cheaper forms
of borrowing.

Bills of
exchange enable the company to obtain
short-term finance from a bank or discount
house where they send bills of exchange for
discounting,

Trade
credits are quite normal in business.
They are often granted by the sellers
allowing the buyers to pay in some time,
say in three months.

‘ A firm may
acquire some equipment such as cars,
lorries, office equipment and some type of machinery
on hire-purchase terms. It makes a de­posit
and pays the outstanding amount by instal­ments
over two or three years. Ownership passes to
the buyer when the final instalment is paid.

In case of
leasing the firm will also pay the out­standing
amount by instalments over two or three years.
When the final i
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