When Choosing to Use Internal Funds as Means to Support

question 7

Essay

When choosing to use internal funds as means to support growth, discuss to what ends this growth must be ultimately focused on (in terms of financing considerations).

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Definitions:

Book Value

The value of a company's asset as it appears on the balance sheet, calculated as the cost of the asset minus accumulated depreciation.

Merchandise Inventory

Goods or products that a retailer, wholesaler, or distributor holds for the purpose of selling to customers.

Gain on Realization

Profit recognized from selling an asset for more than its book value.

Loss or Gain

The financial result from business transactions, investments or other financial events, indicating a profit (gain) or a deficit (loss).