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Related Flashcards
Related Topics
Cards In This Set
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Business angels
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Wealthy and entrepreneurial investors who
risk their money in small to medium sized
businesses that have high growth potential.
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Capital expenditure
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Spending by businesses on fixed assets
such as the purchase of land and
buildings.
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Creditors
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Individuals or organizations that the business owes money to that needs to be settled within the next 12 months.
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Debentures
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A type of long term loan to a business with the promise of fixed annual interest payments to the debenture holders.
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External Financing
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Getting sources of finance from outside the organization, such as through debt, share capital, or funding from the government.
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Factoring
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nA financial service whereby a factor collects debts on behalf of other businesses, in return for a fee.
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Leasing
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nsuitable if a firm needs to use expensive assets such as equipment or vehicles.
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Non-recourse debt factoring
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A financial service where a debt factor, such as a bank, protects its customer against bad debts that they might incur.
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Overdrafts
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nA service offered by financial institutions that allow a business to spend in excess of the amount in its account, up to a predetermined limit.
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Revenue expenditure
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Spending on the day-to-day running of a business, such as rent, wages, and utility bills.
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Sources of finance
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The general term used to refer to where of how businesses obtain their funds, such as from working capital, commercial lenders and/or government assistance.
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Working Capital
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the day to day money that is available to a business
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Accounting rate of return
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an investment appraisal technique that calculates the average annual profit of an investment project.
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Discounted cash flow
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•an investment appraisal technique that reduces the value of the money that a business receives in future years.
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Investment appraisal
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•a financial decision-making tool that helps managers to assess whether certain investments projects should be undertaken based mainly on quantitative techniques.
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