• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Sources of Finance.

Extracts from this document...


Sources of Finance Private sector financing Firms need short-term finance to start up a business or to cover day-to-day running costs. This is repaid over a short period and provides a firm with working capital. Long-term capital is used to grow or expand and is paid back over a number of years. Sources of finance can be: * Internal * External Internal sources of finance are usually a cheaper way to raise working capital e.g. sales revenue, partners, owner's funds and retained profit. Obtaining finance externally is usually the last option as interest has to be paid increasing the cost e.g. ...read more.


3. Grants from central or local government can cost the firm nothing. 4. Firms often lease equipment or machinery to avoid a large outlay of cash. This is useful if a firm needs to upgrade within the medium term as technology advances. Economies Planned Economy In a pure planned economy the government decides what will be produced - this system operated in the former communist countries. Resources may not be used efficiently but all members of society will have food, housing and work. Market Economy In a pure market economy the use of factors of production is determined solely by supply and demand. ...read more.


The fixed cost curve is shown overleaf. VARIABLE COSTS These costs vary directly with the level of production, e.g., fuel, labour and raw materials. SEMI-VARIABLE COSTS Some costs are not so easy to classify. They are fixed for certain levels of production, however if output rises too much costs will also rise. TOTAL COSTS When fixed and variable costs are added together (plus any semi-variable costs) we arrive at the fixed costs figure. DIRECT COSTS These are costs that can be directly attributed to the production of a particular good or service, e.g., raw materials and piece rate wages. INDIRECT COSTS (OVERHEADS) These can't be directly linked to a good or service. They can be difficult to control and managers have to be aware of them, e.g., depreciation, management, administration and marketing. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Toyota Motor Company Limited

    The strategies that Toyota is now practicing and planning to adopt will be discussed more in depth. Toyota expects that these strategies will not only help to change its ranking, but also its sales in both domestic and overseas. Toyota's performance in domestic and overseas in the recent years Japan: Toyota generate most of its profits domestically.

  2. Retailing In India - A Government Policy Perspective

    Several issues distort the real estate market - laws heavily skewed towards tenants, restrictive zoning legislation, non-availability of government-owned land combined with fragmented ownership of privately held property, and disorganized transactions due to a lack of clear titles and transparency.

  1. Forms Of Finance.

    Loan of a credit union- you have to be a member to get a loan there is a interest of possible 10%-12% it works out roughly 1% a month you would pay your loan off as you go along etc.

  2. Banking and International Finance.

    the website containing the formal definition may be targeting Economics students while Rothchild may be targeting apprentice i.e. the average reader. Also, there may not be the need for readers to know the meanings in such depth, which could be why has given a basic definition.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work