MANAGING FINANCIAL RESOURCES

Managing Financial Resources



Table of Contents

Introduction3

Discussion3

Task 13

Question 13

Question 24

Question 36

Task 26

Question 16

Question 29

Question 39

Question 4 (a)11

Question 1 (a)13

Conclusion15

Managing Financial Resource and Decisions

Introduction

Financial management is a set of core activities in an organization. It ensures that the financial aspects of the project (eg, budgeting, financial reports and other necessary procedures) are performed in a controlled manner. Financial management focuses on how, when and why the money is, or should be allocated to project activities. There are two important aspects of financial management that should be mentioned. The first refers to all aspects of planning for the fiscal year, in particular the development of budgets and cash flow projections (Block, 2000, pp. 89-97). These documents are prepared prior to the start of the project and the figures are based on assumptions. The second aspect concerns the set written financial records. They are prepared for the implementation of the project.

Discussion

Task 1

Question 1

A custom made t-shirt for the football loving youth. The shirt will be endorsed by renowned international and English Premier League football players. The list of endorsed players will be provided to the customers before hand, and they will be able to pick and choose a player, whose signature will be placed on their shirt. The shirt will be sold for £ 100.

The five sources of finance are as follow:

Self Savings

Credit Card

Bank Credit

Notes Payable

Term Finance Certificates

The bank credit is most suited to the chosen business (Robinson, 2006, pp. 28-29.).

Question 2

Bank Credit: Bank credit is one of the most used by companies today to obtain necessary financing (Brealey, 2007, pp. 220-235). Almost all of them are commercial banks that handle the checking accounts of the company and have a greater lending capacity in accordance with the laws and banking arrangements currently in place and provide most services that the company requires.

Advantages

If the bank is flexible in its terms, there will be more likely to negotiate a loan that meets the needs of the company, which places it in the best environment to operate and profit.

Allows organizations to stabilize in case of trouble with respect to capital.

Disadvantages

A very strict bank conditions, may unduly restrict the ease of operation and be detrimental to the profits of the company.

A Bank Loan borrowing rate brings the company must cancel the bank sporadically in interest.

Notes Payable

It is a negotiable instrument which is a "promise" unconditional written, directed a person to another, signed by the formulant the promissory note, promising to pay the filing thereof, or a fixed date or time determinable future, a certain amount of money together with his interest at a rate specified in the order and the carrier (Poston, 2005, pp. 550-570. ).

Advantages

It is payable in cash.

There is high security payment when making a commercial operation.

Disadvantages

You may encounter a failure to pay required legal action.

Term Finance Certificates

It is a tool written in the form of an unconditional promise, certified, in which the borrower promises to pay a specified sum at a future date certain, together ...