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Explain the main basic factors that requires to be taken into account in selecting the best method of financing a plant expansion

Explain the main basic factors that requires to be taken into account in selecting the best method of financing a plant expansion.

Answers

Charles
The Main basic factors that require to be taken into account in selecting the best method of financing a plant expansion are explained below:

a) Cost of finance
The cost of finance is an Important factor in the choice of source of finance. The cost of finance should be less than the expected return from the project for which the finance is required

b) Availability of finance
A business finance should be easily available to be a preference for an enterprise

c) Flexibility
A business enterprise will prefer to use that source of finance which is more flexible. It means that a company can use a particular source of finance if the need arises and the repay the money when it's not needed anymore.

(d) Mode of repayment
A business enterprise will prefer that mode of finance which allows the repayment of the principal and interest in easy and convenient instalments.
Charles W answered the question on December 27, 2017 at 13:44

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