Paper 1 · Sources of Finance
When choosing a source of finance, an enterprise should first consider
Athe cost of the finance and how long it is needed for
Bthe number of workers the enterprise currently employs
Cthe level of tax paid by the enterprise's customers
Dthe distance between the enterprise and its suppliers
Explanation: The two questions that decide the choice are how much the money will cost and how long it is required for. Short-term needs such as a stock purchase suit an overdraft or trade credit, while a building bought for twenty years needs long-term finance. Security available and the effect on ownership are the next considerations.
Derived from ZIMSEC Business Enterprise Skills Paper 1, Specimen Paper (edition A), Q3