Sources of Finance – NBC Institute

SCS – Nov 2021 – L3 – Q7b – Sources of Finance

Analyze the net benefit of the proposed factoring arrangement for COM.

Question

The management of COM is seeking advice from the finance team on whether or not to accept the proposed trade receivable factoring arrangement. The management is interested in knowing whether the factoring arrangement will benefit the company in totality.

Required:
You are the Financial Controller, and the CFO has assigned you the responsibility to determine the net benefit of the factoring financing arrangement. Prepare a brief presentation on the net benefit of the proposed factoring arrangement to be submitted to the CFO.

Answer

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Tags: Factoring, Finance Costs, Financing Options, Liquidity, Trade receivables
Level: Level 3

Topic: Sources of Finance

SCS – Nov 2021 – L3 – Q7a – Sources of Finance

Analyze and recommend the most cost-effective financing option for acquiring 5G equipment: lease or borrow to buy.

Question

The management of COM requires a detailed analysis of the two financing options (borrow to buy or lease) under consideration to determine the cheaper alternative to be used to acquire the 5G equipment. The CFO has been requested to do a presentation at the next Executive Committee (EXCO) meeting.

Required:
You are the CFO, and you are to prepare a presentation to advise EXCO of the cheaper financing option. Your presentation must include detailed computations supporting your advice.
Marks: 15 marks

Answer

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Tags: 5G Equipment, Borrow to Buy, Cost Analysis, Financing Options, Lease
Level: Level 3

Topic: Sources of Finance
Series: NOV 2021

SCS – July 2023 – L3 – Q5b – Sources of Finance

Explain two benefits of increasing long-term capital using retained profits.

Question

When companies retain profits in the business, the increase in the retained profits adds to equity reserves. This view was suggested by SavvyTech plc management team to the board. The Board is not convinced and seek further explanation.

Required:
Explain TWO (2) benefits to the board of directors on what it means to increase long-term capital using retained profits in SavvyTech plc.

Answer

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Tags: Equity, Financial strategy, Long-term Capital, Retained Profits
Level: Level 3

Topic: Sources of Finance
Series: JULY 2023

SCS – Nov 2023 – L3 – Q5b – Sources of Finance

Explaining three advantages of issuing convertible bonds for NSL and investors/bondholders.

Question

To defer dilution of the Martinsons’ shareholding of NSL, they have agreed to issue a 10-year convertible bond to new investors/bondholders.

Required:
Explain THREE (3) advantages of issuing convertible bonds to NSL and to investors/bondholders, respectively.
(9 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Convertible Bonds, Debt Financing, Equity Dilution, Shareholders
Level: Level 3

Topic: Sources of Finance
Series: NOV 2023

SCS – Nov 2021 – L3 – Q7b – Sources of Finance

Analyze the net benefit of the proposed factoring arrangement for COM.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Factoring, Finance Costs, Financing Options, Liquidity, Trade receivables
Level: Level 3

Topic: Sources of Finance

SCS – Nov 2021 – L3 – Q7a – Sources of Finance

Analyze and recommend the most cost-effective financing option for acquiring 5G equipment: lease or borrow to buy.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: 5G Equipment, Borrow to Buy, Cost Analysis, Financing Options, Lease
Level: Level 3

Topic: Sources of Finance
Series: NOV 2021

SCS – July 2023 – L3 – Q5b – Sources of Finance

Explain two benefits of increasing long-term capital using retained profits.

Question

Required:
Explain TWO (2) benefits to the board of directors on what it means to increase long-term capital using retained profits in SavvyTech plc.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Equity, Financial strategy, Long-term Capital, Retained Profits
Level: Level 3

Topic: Sources of Finance
Series: JULY 2023

SCS – Nov 2023 – L3 – Q5b – Sources of Finance

Explaining three advantages of issuing convertible bonds for NSL and investors/bondholders.

Question

To defer dilution of the Martinsons’ shareholding of NSL, they have agreed to issue a 10-year convertible bond to new investors/bondholders.

Required:
Explain THREE (3) advantages of issuing convertible bonds to NSL and to investors/bondholders, respectively.
(9 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Convertible Bonds, Debt Financing, Equity Dilution, Shareholders
Level: Level 3

Topic: Sources of Finance
Series: NOV 2023

Topic: Sources of Finance

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SCS – Nov 2021 – L3 – Q7b – Sources of Finance

Analyze the net benefit of the proposed factoring arrangement for COM.

SCS – Nov 2021 – L3 – Q7a – Sources of Finance

Analyze and recommend the most cost-effective financing option for acquiring 5G equipment: lease or borrow to buy.

SCS – July 2023 – L3 – Q5b – Sources of Finance

Explain two benefits of increasing long-term capital using retained profits.

SCS – Nov 2023 – L3 – Q5b – Sources of Finance

Explaining three advantages of issuing convertible bonds for NSL and investors/bondholders.

SCS – Nov 2021 – L3 – Q7b – Sources of Finance

Analyze the net benefit of the proposed factoring arrangement for COM.

SCS – Nov 2021 – L3 – Q7a – Sources of Finance

Analyze and recommend the most cost-effective financing option for acquiring 5G equipment: lease or borrow to buy.

SCS – July 2023 – L3 – Q5b – Sources of Finance

Explain two benefits of increasing long-term capital using retained profits.

SCS – Nov 2023 – L3 – Q5b – Sources of Finance

Explaining three advantages of issuing convertible bonds for NSL and investors/bondholders.

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SCS – Nov 2021 – L3 – Q7b – Sources of Finance

Analyze the net benefit of the proposed factoring arrangement for COM.

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SCS – Nov 2021 – L3 – Q7a – Sources of Finance

Analyze and recommend the most cost-effective financing option for acquiring 5G equipment: lease or borrow to buy.

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SCS – July 2023 – L3 – Q5b – Sources of Finance

Explain two benefits of increasing long-term capital using retained profits.

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SCS – Nov 2023 – L3 – Q5b – Sources of Finance

Explaining three advantages of issuing convertible bonds for NSL and investors/bondholders.

You're reporting an error for "SCS – Nov 2023 – L3 – Q5b – Sources of Finance"

SCS – Nov 2021 – L3 – Q7b – Sources of Finance

Analyze the net benefit of the proposed factoring arrangement for COM.

You're reporting an error for "SCS – Nov 2021 – L3 – Q7b – Sources of Finance"

SCS – Nov 2021 – L3 – Q7a – Sources of Finance

Analyze and recommend the most cost-effective financing option for acquiring 5G equipment: lease or borrow to buy.

You're reporting an error for "SCS – Nov 2021 – L3 – Q7a – Sources of Finance"

SCS – July 2023 – L3 – Q5b – Sources of Finance

Explain two benefits of increasing long-term capital using retained profits.

You're reporting an error for "SCS – July 2023 – L3 – Q5b – Sources of Finance"

SCS – Nov 2023 – L3 – Q5b – Sources of Finance

Explaining three advantages of issuing convertible bonds for NSL and investors/bondholders.

You're reporting an error for "SCS – Nov 2023 – L3 – Q5b – Sources of Finance"

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