John has a great idea to setup a pie and pastie factory. He needs $200,000 to buy the equipment and to lease suitable premises for a year. He is not sure whether he should setup a company and issue 200,000 shares to his friends, or else try to borrow $200,000 from a bank to raise those funds. Explain to him the advantages and disadvantages of both alternatives.
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John has a great idea to setup a pie and pastie factory. He needs $200,000 to buy the
equipment and to lease suitable premises for a year. He is not sure whether he should setup a
company and issue 200,000 shares to his friends, or else try to borrow $200,000 from a bank to
raise those funds.
Explain to him the advantages and disadvantages of both alternatives.
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Solved in 2 steps
- john has a great idea to setuo a pie and pastie factory. He needs $200,000 to buy the equipment and to lease suitable prmises for a year. He is not sure whether he should setup a company and issue 200,000 shares to his friends, or else try to borrow $200,000 from a bank to raise those funds. Explain to him the advantages and disadvantages of both alternatives.Suppose Alex would like to use $8,000 of his savings to make a financial investment. One way of making a financial investment is to purchase stock or bonds from a private company. finance. Buying a bond Suppose NanoSpeck, a biotechnology firm, is selling bonds to raise money for a new lab-a practice known as Issued by NanoSpeck would give Alex the firm. In the event that NanoSpeck runs into financial difficulty, will be paid first. Suppose instead Alex decides to buy 100 shares of NanoSpeck stock. Which of the following statements are correct? Check all that apply. O An increase in the perceived profitability of NanoSpeck will likely cause the value of Alex's shares to rise. ONanoSpeck earns revenue when Alex purchases 100 shares, even if he purchases them ftrom an existing shareholder. The Dow Jones Industrial Average is an example of a stock exchange where he can purchase NanoSpeck stock. higher Alternatively, Alex could make a financial Investment by purchasing bonds issued by the…Suppose Clinton decides to use $7,500 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. finance. Buying a share of Suppose Bayzer, a pharmaceutical firm, is selling stocks to raise money for a new lab. This practice is called Bayzer stock would give Clinton the firm. In the event that Bayzer runs into financial difficulty, will be paid first.
- Suppose Clinton decides to use $9,500 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. Suppose Arcadia, a biomedical research firm, is selling stocks to raise money for a new lab. This practice is called finance. Buying a share of Arcadia stock would give Clinton the firm. In the event that Arcadia runs into financial difficulty, will be paid first. Suppose Clinton chooses to buy 250 shares of Arcadia stock. Which of the following statements are correct? Check all that apply. The Dow Jones Industrial Average is an example of a stock exchange where he can purchase Arcadia stock. Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Clinton's shares to decline. The price of his shares will rise if Arcadia issues additional shares of stock. Alternatively, Clinton could undertake their financial investment by purchasing bonds…After finishing an MS Structural Engineering, Alvin has set up a structural engineering consultation firm. He needs to buy a license for a computer software that will be used in the structural design. The license costs Php 95,000 and is likely to generate Php 37,500 per year. Since his current loans are excessive, no financial institution is interested in lending him any more money. He discussed the difficulty of raising the capital with his rich uncle who happens to be generous. His uncle agrees to lend him Php 95,000 at 4% simple interest provided Alvin pays him the interest annually on time. How much will Alvin earn annually by investing in the system after paying the interest to his uncle?Tony and Suzie have purchased land for a new camp. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow an additional $1 million, but unfortunately the bank turned them down as too risky. Undeterred, they promoted their idea to close friends they had made through the outdoor clinics and TEAM events. They decided to go ahead and sell shares of stock in the company to raise the additional funds for the camp. Great Adventures has authorized $1 par value common stock. When the company began on July 1, 2024, Tony and Suzie each purchased 10,000 shares (20,000 shares total) of $1 par value common stock at $1 per share. The following transactions affect stockholders’ equity during the remainder of 2025: November 5 Issue an additional 136,000 shares of common stock for $10 per share. November 16 Purchase 13,600 shares of its own common stock (i.e., treasury…
- Tony and Suzie have purchased land for a new camp. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow an additional $1 million, but unfortunately the bank turned them down as too risky. Undeterred, they promoted their idea to close friends they had made through the outdoor clinics and TEAM events. They decided to go ahead and sell shares of stock in the company to raise the additional funds for the camp. Great Adventures has authorized $1 par value common stock. When the company began on July 1, 2024, Tony and Suzie each purchased 10,000 shares (20,000 shares total) of $1 par value common stock at $1 per share. The following transactions affect stockholders' equity during the remainder of 2025: November 5 Issue an additional 116,000 shares of common stock for $10 per share. November 16 Purchase 11,600 shares of its own common stock (i.e., treasury stock) for…Discuss the following scenarios, then to decide which option is best and why. Susan and Jose rent an apartment and have been saving for a house. They now have $10,000 in the bank. Susan owes $4,000 on a low-interest credit card; Jose owes $4,500 on his car. Susan wants to pay the credit card and car off to eliminate the debt. Jose wants to keep the cash in the bank and continue saving for the house. What are the pros and cons of each one’s argument? Please be detailed and concise. Feel free to use a chart or table to represent your argument. Jack is a 40-year-old construction worker. He makes $33,500 per year. He only saves 5 percent of his salary per year since it is all he feels he can afford. His friend Joe suggests that he invest his money conservatively so that it won’t lose as much value if the market takes a nosedive. His other friend Jim thinks that investing aggressively with high risk is the way to go since Jack has several years to work to make up for any losses. What do…Joe Latte completed a business plan and determines that it will take$120,000 to open the coffee and gelato shop. He has $30,000 of his ownmoney and will have to obtain $90,000 in loans or grants. How should Joego about getting financing? What is the probability that he can obtain agrant to start a combination coffee and Italian ice cream shop?
- Tony and Suzie have purchased land for a new camp. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow an additional $1 million, but unfortunately the bank turned them down as too risky. Undeterred, they promoted their idea to close friends they had made through the outdoor clinics and TEAM events. They decided to go ahead and sell shares of stock in the company to raise the additional funds for the camp.Great Adventures has authorized $1 par value common stock. When the company began on July 1, 2021, Tony and Suzie each purchased 10,000 shares (20,000 shares total) of $1 par value common stock at $1 per share. The following transactions affect stockholders’ equity during theremainder of 2022:November 5 Issue an additional 100,000 shares of common stock for $10 per share.November 16 Purchase 10,000 shares of its own common stock (i.e., treasury stock) for $15…Tom plans to buy a house. He notice that current interest rate is really high. Considering that the stock market is volatile, he decides to take out $100,000 from the stock markets and create a certificate of deposit account at a rate of 3.5%. He predicts that later when the house price drops, he can buy a very good single-family house with about $750,000. The down payment rate is 20%. Please predict the exact time when he can buy a house. Group of answer choices 14.33 8.47 14.66Jerry owns a restaurant and has the opportunity to buy a high-quality espresso coffee machine for $5,000. After carefully studying projected costs and revenues, Jerry estimates that the machine will produce a net cash flow of $1,600 annually and will last for five years. He determines that an interest rate of 10% is an adequate return on investment for his business. Calculate the present value of the machine to Jerry. Based on your calculation, do you think a decision to purchase the machine would be wise?