BUSINESS FINANCE

Which of the following is NOT a reason why a business needs money? (1) to start the business to expand the business to deal with negative cash-flow problem to increase prices of its products When a business expands it usually needs finance for which one of the following reasons? (1) to pay for increased working capital to pay back shareholders to pay the government a grant to provide a loan to the bank Which one of the following is NOT a function of the Finance Department? (1) record all financial transactions recruiting employees forecasting cashflows preparing final accounts Fill up the blank spaces with the correct financial terms. (4) The money needed to set up a new business is the start-up capital. The money needed to finance the day-to-day running costs of a business is the working capital. Spending on non-current assets such as machinery is capital expenditure. Things a business owns that will last longer than a year, such as buildings is non-current assets. Define 'capital'. (1) Identify two different ways how could a business expand. (2) Why is working capital important to a business? (2) CASE STUDYMilena started her business- a juice shop-in her home town in Bolivia. She obtained start-up capital. Through her hard-work, dedication and business skills, she was soon selling enough juice and milk to purchase two large refrigerators. The growth of her business continued and Milena took out an additional loan to buy a refrigerated truck.Today, Milena has plans to expand her business to the next town. She is proud of of her ability to create jobs for others.a) Define 'start-up capital'. (1) Use the case study given above to answer questions a, b, c and d. b) Identify two day-to-day expenses for Melina's business. (2) c) Using an example from Melina's business, define capital expenditure. (2) d) Why does Melina need more finance for her business? (3)