Equality and debt case assignment 5 Essay Example | Topics and Well Written Essays - 750 words

Equality and debt case assignment 5 - Essay Example Debt financing has a fixed term for repayment. Like loans the terms can be either short or long and is normally raised from banks and small business administration (SBA). It has a fixed rate of interest payable. However equity financing is not repayable; the lender has a right over the business and can participate along with the board of directors, in the annual shareholder’s meeting, to have an active role in the decision making of the company. It is generally raised by family or friends, who are normally called ‘Angel investors’ (Samuels et al, 2000). Also financing can be got by venture capitalists, private equity firms and the investors are normally referred to as ‘Venture Capitalists’(Samuels et al, 2000). This form of financing does not have a fixed cost, but the cost varies based on the performance of the company. Also with newer investors becoming a part of the business makes the business more credible and gains higher attention from the lende rs network (Weston and Copeland, 1988). In debt financing there is a tendency of businesses to rely too much on the mode of financing, however if the company does not generate enough revenues to pay back the loans it could cause a lot of problems for the business like bad credit ratings and can even lead to closing down of the business. Also it makes the company unattractive to investors. If the company has a lot of loans investors would view and classify the company as ‘High Risk’ which would cause them not to make investments in the business (Samuels et al, 2000). The debt to equity ratio normally affects the cost of debt; hence if the ratio is high it would make it difficult for the business to obtain debt financing. Both the sources of financing require to be well balanced, and it is essential that the company carries out enough debt to balance the equity investment however care needs to be taken not to affect the chances of getting

What do you think should be Project Procurements added contribution in Essay

What do you think should be Project Procurements added contribution in the likely difficult economic climate for business in 2012 - Essay Example The Project Management Institute (2004, 269) defines this as the process of acquiring or purchasing the results, products or services required from outside the team members of the project to perform the work. The essay will discuss the added value that project procurement may bring in the volatile and diffi9cult 2012 business environment. In order to understanding the added value that comes with project procurement, one needs to properly understanding the project procurement process. The first steps involved in the process include planning, acquisitions and purchases (Walker and Rowlinson, 2008). In this stage, the needs of the project that require outsourcing are identified after which the sources for obtaining the required results, goods or services are differentiated by conducting a market analysis.The next step is planning the procurement as noted by Walker and Rowlinson (2008). Here, the objectives of the project are reviewed to ensure that the acquisition activities do not differ from the objectives of the project. Wysocki et al. (2000) explain that the completion of this step includes pointing out the resources required for the acquisition to take place, the determination of the type of contract to be engaged in so as to secure the acquisition, and finally, procurement management plan preparation. The other three steps that need to be completed before project procurement is conducted are requesting seller responses, selecting sellers, and contract planning according to Wysocki et al (2000). In contract planning, the products or services required are described in detail. Vendors are then identified and the best is chosen based on their ability to provide the results, goods or services required (Cheung et al, 2001).After successful vendor selection, the contract is negotiated. This is the forth step, also known as contract administration. This is when the