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7. (a) Identify a suitable source of finance for the purchase of a delivery van in a new business enterprise - Leaving Cert Business - Question 7 - 2008
Question 7
7. (a) Identify a suitable source of finance for the purchase of a delivery van in a new business enterprise. (b) Give two reasons for your choice. (i) (ii)
Worked Solution & Example Answer:7. (a) Identify a suitable source of finance for the purchase of a delivery van in a new business enterprise - Leaving Cert Business - Question 7 - 2008
Step 1
Identify a suitable source of finance for the purchase of a delivery van in a new business enterprise.
Answer
A suitable source of finance for the purchase of a delivery van in a new business enterprise is Hire-Purchase. This type of financing allows the business to acquire the van without paying the full cost upfront, making it more manageable for new enterprises.
Step 2
Give two reasons for your choice.
Answer
(i) No security is required. This makes it easier for new businesses, which may not have substantial assets to secure a loan, to obtain the necessary funds.
(ii) Easier to obtain than other sources of finance. Hire-purchase agreements generally have less stringent requirements compared to traditional loans, thus making it a favorable option for new businesses.