Question on financing operations
Course:- Finance Basics
Reference No.:- EM1349664

Assignment Help
Assignment Help >> Finance Basics

You are the CEO of a medium-sized U.S. manufacturing company that has received several inquiries from prospective buyers of your equipment abroad. Each item of equipment that you produce sells for about $20,000 in the United States and there are prospects for selling up to 50 units to one customer overseas. The problem is that once you have firm orders from overseas buyers you will need financing in order to have the money needed to actually produce those units. Among the financing options raised in an internal company brainstorming session were the following

* Loan from U.S. bank
* Have customer pay in advance

Evaluate and compare the two options that you decide to address. Among other things, be sure to discuss whether the option is workable. Also, be sure to identify additional information that would be needed to make a decision (such as what security the company might have for a loan, etc.)


Put your comment

Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
A local radio station issues a one-year zero-coupon bond. The face value is 1000. You believe that the probability of bankruptcy is 8%. The appropriate discount rate (taking
Use the annual report for the year ending 2013 & 2014. Your group will need to review the major sections of this report in order to familiarize yourselves with the content of
Did the company gain or lose by issuing bonds with conversion feature, as opposed to issuing straight bonds? What motivated the investors to buy bonds at a lower coupon rate
Which of the two firms appears to have more high-growth, positive-NPV investment opportunities? Which pays the higher relative dividend? Do these results support the agency
Use the European option-pricing models developed in the chapter to value the call of problem 9 and the put of problem 10. Assume the annualized volatility of the Swiss franc i
Buehler Company on June 15 sells merchandise on account to Chaz Co. for $1,000, terms 2/10, n/30. On June 20, Chaz Co. returns merchandise worth $300 to Buehler Company. On
What conditions for the population and the study design are required by the procedure you used in (a)? Which of these conditions are important for the validity of the procedur
The Family Practice Clinic has long-term debt of 567,000 dollar as of December 31, 2009 determine the equivalent value of long-term debt in 2005.