CLN is a public limited company. It sells a range of electrical products such as televisions and computers. The Managing Director has been analysing CLN's accounts. An extract is shown in Table 3.1. He said: 'We need more finance. Last year CLN made a loss of $$\(\$ 250 \mathrm{~m}\)$$. I blame increased competition from e-commerce.' CLN plans to close 30 of its 120 shops. This decision will affect many of its stakeholders including the local communities. The number of sales from each shop will be used to decide which shops to close. State four factors that can affect the source of finance a business might use. Factor 1: ........................................................................................................................ ....................................................................................................................................... Factor 2:. ........................................................................................................................ ....................................................................................................................................... Factor 3:- ........................................................................................................................ ....................................................................................................................................... Factor 4 : ........................................................................................................................ .......................................................................................................................................

Business
IGCSE&ALevel
CAIE
Exam No:0450_w20_qp_13 Year:2020 Question No:3(c)

Answer:



Knowledge points:

5.1.2.1. Internal sources and external sources with examples
5.1.2.2. Short-term and long-term sources with examples, e.g. overdraft for short-term finance and debt or equity for long-term finance
5.1.2.3. Importance of alternative sources of capital, e.g. micro-finance, crowd-funding
5.1.2.4. The main factors considered in making the financial choice, e.g. size and legal form of business, amount required, length of time, existing loans
5.1.2.5. Recommend and justify appropriate source(s) of finance in given circumstances

Solution:

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