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Sources of Finance


2.2 Scenario 3 Cash asset of Sandyfoot Ltd is £15000 while net profit in 2014 is £17500. In regards to continue a quality program for the Tennis Racquets, the company wants to raise £50,000 while there are two options available, such as i) Bank Short Term Loan at 10% APR ii) Long Term borrowing for 5 years at 8% interest rate. You are required to recommend the company whether short term or long term borrowing will be suitable for the company by assessing the sources of funds available to Sandyfoot Ltd for this specific project.