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Which of the following is a short-term source of finance suitable for a new business? A - OCR - GCSE Business - Question 6 - 2020 - Paper 1
Question 6
Which of the following is a short-term source of finance suitable for a new business? A. Retained profit B. Sale of business assets C. Share issue D. Trade credit ... show full transcript
Worked Solution & Example Answer:Which of the following is a short-term source of finance suitable for a new business? A - OCR - GCSE Business - Question 6 - 2020 - Paper 1
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Evaluate Each Option
Answer
A. Retained profit: Generally considered a long-term source of finance since it relies on profits accumulated over time.
B. Sale of business assets: This can generate funds but is often viewed as a long-term solution and may not be reliable for short-term needs.
C. Share issue: This refers to selling shares to raise capital and is usually a longer-term financing option suitable for established businesses.
D. Trade credit: This is a short-term financing option where businesses receive goods or services and pay for them later. It is ideal for new businesses that need immediate resources without upfront cash.
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