Funding and Benefits of Solar-Powered Trash Compactor Bin for Australian Property Management

Facilities management

TABLE OF CONTENTS
Task 3...............................................................................................................................................3
Funding for the purchasing of the solar-powered trash compactor bin.......................................3
The initial price of the solar-powered trash compactor bin.........................................................4
Annual maintenance requirement and the cost of the solar-powered trash compactor bin.........4
Impact on the current year operational budget and the next year operational budget.................4
Impact on the profit and loss, balance sheet and the cash flow statement of the company.........4
Payback period and the net present value....................................................................................5
Benefits of solar-powered trash compactor bin...........................................................................6
References........................................................................................................................................8

TASK 3
Funding for the purchasing of the solar-powered trash compactor bin
The company can purchase the solar-powered trash compacter bun either by the raise the funds
through the issue of the equity shares of the company or by taking the bank finance from the
banks or the financial institutions (Balaban, Župljanin, and Ivanović, 2016).
Raising funds through the issue of the equity shares is regarded as the permanent funding since
generally in the future it is not required to repay the amount. Further by issuing the equity share,
the company can get the advantage of reducing the debt of the firm (Gorton, and Winton, 2017).
Moreover, there is no obligation to pay the interest and the principal amount; the company is
required to pay only the dividend declared by the company in its annual general meeting to the
shareholders. Apart from the above obtaining the funds by issuing the shares is the flexible
process as the company can decide the number of issue of the shares, price as per the
requirement of the funds for the company (Vismara, 2016). However, through the issue, the
control over the company will be diluted as the new investor by purchasing the share of the
company can exercise the control over the company.
On the other hand, for purchasing the compactor bin company can take the funds from the banks
after keeping any security to the bank. In this situation, the company is required to the pay the
interest and the principal amount in a timely manner. The Company can avail the tax benefit on
the payment of interest paid to the banks. Further, the bank finance does not dilute any control
over the company. Therefore, the control remains only with the existing shareholders of the
company. However it may be possible that bank can put some compliance with the company,
then it will be necessary for the company to follow all the compliance according to the terms of
the bank.
On the basis of the above evaluation raising funds through the bank loan will be a more proper
source of finance for the Australian Property Management company, due to the growth and the
size of the company. The company can get the tax benefit advantage on the payment of the
interest to the bank. Along with this, the control will remain to the existing shareholders of the
company.