ACCOUNTING

[m12345]

Someone please help me with these questions!
What are alternatives to small business ownership (eg. Shares, cash in bank, term deposits, property) – features,
advantages and disadvantages?
Internal sources of finance – features, advantages and disadvantages?
External sources of finance - features, advantages and disadvantages?

[Cranium002]

A share is a document that verifies part-ownership in a public company. It has the benefits of greater returns, tax benefits, diversification and flexibility. However it has the risks of capital loss, long-term profits.

Cash in banks is a safe option to be invested but the interests you received is not as high as it is in term deposits. However, you can withdraw or deposit money at any time you want.

Cash in term deposits is another safe option, with high interest rates. But, after depositing your cash you aren't allowed to withdraw until a certain period is reached. You can deposit as low as 1000, the term you have to wait varies from 3 months to 5 years.

Property is a safe investment. There are some key factors that should be considered before buying. This includes, interest rates, the rental income and the ability to pay short term debts (liquidity). Though it is a massive market, some areas,prices can double within years but others property can depreciate especially when there is low demand of buying and high demand of selling in that area. Higher interest rates = higher mortgages.

 

[Cranium002]

Hope this helps