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Finance in Hospitality Industry Assignment Sample

   

Added on  2019-12-04

7 Pages1584 Words176 Views
Finance inHospitality Industry

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1TASK 2............................................................................................................................................1TASK 3............................................................................................................................................2TASK 4............................................................................................................................................3CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5

INTRODUCTIONFinancial management is the heart of business and it is the area that drives it forward.Therefore, in order to start-up a new venture, a company requires funds to manage its operationseffectively (Battini, Persona and Sgarbossa, 2014). The present research is conducted for thepurpose of providing readers with an insight of various sources of finance and their pros andcons for implementing the same in Westland Ltd.TASK 1In order to start up a new business organization, it is essential to manage and collectprescribed funds for its setup. As per the given case scenario, the entrepreneur can acquire fundsfrom the following sources:Hire purchase: Herein, the owner can purchase the required equipment by hiring it andpaying the amount in respective instalments as per the terms and conditions of the contract. Themajor benefit is that the entrepreneur does not need to keep any security to the offerer (Caglayanand Demir, 2014). Moreover, the possession of the equipment is transferred to the owner as soonas he pays all the instalments. The drawback of hire purchase is that it involves high risk if theequipment gets damaged and to carry out other activities of business enterprise, owner has toarrange funds from other sources also.Bank Loan: The amount that is required by the owner to start-up the business can betaken from bank by keeping a certain security in regard to the loan. There are several loopholesand that are as follows. The owner is required to keep some security with the bank and he doesnot have any assets as such. Moreover, the amount of interest is quite high (Bhattacharya andLondhe, 2014). The only advantage bank loan possess is that it can be easily availed by theowner.Venture capital: There are several companies that provide loans to launch newbusinesses in regards with some amount of share in the management of the organization. As suchthere are no disadvantages, the company can avail the prescribed amount easily.From the above discussed sources of finance, hire purchase is the best in regards to buyequipments and the entrepreneur can utilize its personal funds to carry out the other businessoperations.1

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