Welcome to Week 9! Once a business is up and running, money will be moving in and going out in multiple directions. When a business’s liabilities are less than their assets, they may want to re-invest some of that cash back into the stock exchange or other investments. This week, you will gain the tools to aid a company in expanding their wealth.
What risk might you encounter when borrowing $1 million?
Answer preview
Businesses at times require some funds to be able to achieve some of its set tasks. The funds come in form of grants and loans which nevertheless have their risks attached. Borrowing $1 million exposes the business to both direct and indirect risks with the crucial one being that the failure to achieve set objectives exposes the organization to the risk of losing more assets worth more than the credited amount. It is therefore essential for the organization before deciding to settle for the borrowing option, to evaluate all options to gather funds and if borrowing is the only option,…
