Question
Bexley Ltd produces a range of car parts for sale to the retail motor trade. As a result of the increasing demand for the businesss
Bexley Ltd produces a range of car parts for sale to the retail motor trade. As a result of the increasing demand for the businesss products, the directors have decided to expand production. The cost of acquiring new plant and machinery and the increase in working capital requirements are planned to be financed by a mixture of long-term and short-term borrowing. Required: Discuss the major factors that should be considered when deciding on the appropriate mix of long-term and short-term borrowing necessary to finance the expansion programme. Q 5(b) [8 Marks] Discuss the major factors that a lender should take into account when deciding whether to grant a long-term loan to the business Q 5(c) [8 Marks] Identify three conditions that might be included in a long-term loan agreement, and state the purpose of each.
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