Advance Financial Accounting
Strengths are associated with opportunities and if you want to take advantage of the lucrative opportunities you need capital investments that must be handled with due care and skill to ensure effective decision-making. This
means that the type of assets to be acquired also depends on the nature, need and resources of the business
some other factors. For example, a large airline would acquire a larger aircraft than a smaller airline
which may opt for a relatively cheaper aircraft.
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If we take the second question in sequence, i.e. “where will the money come from?” Broadly speaking, there are two potential sources of investment. The first sources come from contributions from sponsors or directors who start the business. This part of the investment is called capital or capital contribution.
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Another source of investment is loans and various financial instruments and markets. Banks provide
long and short term loans to the world of business and that was the most important source of business
finance and is widely used.