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P4 - Information of Sources of Finance

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SOURCES OF FINANCE
Matching the appropriate source of finance to a situation

This is a paired exercise. The aim is to match the situation to the most appropriate source of finance.

CASE STUDIES

NEW MINIMARKET

Roy Bhuvnesh has been made redundant after 20 years with a major organisation and has received a lump sum redundancy payment of £70,000. He is planning to set up a new minimarket and has identified suitable premises valued at £180,000 in Green Lane.

BUYING A NEW FREEZER CABINET

A small newsagent in Green Lane has decided to purchase a new freezer cabinet and oven/roasting unit to provide hot meals for local workers and for pupils at Northwood School which serves the surrounding area. The cost of the units is £8,500.

MOBILE CAR VALET SERVICE

You have just passed your driving test and along with a friend are setting a business to offer a mobile car valet service. This would involve them travelling to people’s homes and washing and internally cleaning customer cars. They are hoping to attract private customers and local garages who sell second hand cars.

RE-LOCATING TO SWANSEA

Sentinel Industries plc are planning on moving a major part of its production facility to Swansea. It has identified a site near a former chalk pit that is now not used. The estimated cost of the facility is £10 million.

BUYING NEW EQUIPMENT

Lucas Engineering Ltd with an annual turnover of £3.5 million has decided to install new machinery to help improve its productivity. The equipment needs to be housed in a new building to be constructed on the site. The forecast cost of the building is £260,000 and the equipment £300,000

IMPROVING FACILITIES

Braintree Athletic F.C. are anticipating turning fully professional after the team secured promotion to the football league. To take its place in the league, the league committee have insisted that it also

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