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
If a portfolio has a positive investment in every asset, can the expected return on the portfolio be greater than that on every asset in the portfolio? If the answer is yes
You are evaluating the potential purchase of a small business currently generating $42,500 of after-tax cash flow (D0 = $42,500). On the basis of a review of similar-risk inv
XYZ's Long Term Debt is comprised of 25-year $1,000 face value bonds issued 8 years ago at a 7% coupon rate.  The bonds are now selling to yield 10%.  Their Preferred Stock is
ABC Company plans to control the cost of its capital and decides that the weighted average cost of capital, WACC, should be around 12 percent. ABC also has a target capital st
The required return on this stock is 15 percent, and the stock currently sells for $50 per share. The projected dividend for the coming year is $. (Do not include the dollar
1.Why would a financial manager use the overall cost of capital for investment decisions when the specific decision under consideration may be funded by only one source of cap
A property is financed with a 75% loan at 11.5% over 25 Years. The property produces an ATIRR on total investment of 7.34% based on a tax rate of 31%. What can be said about
Does this country(uk) have stock exchanges? If yes, how many companies are listed and what is the total market capitalization? Do you consider the market as "most liquid",