Description
Question 1:
Muscat Manufacturing Oman LLC, a leading manufacturer in plastics is planning to expand its operations in Muscat.
The corporate financial adviser has submitted the financial requirement for the expansion to the board of directors.
The report reveals that the company needs to raise a total of RO 40 million to sustain the new project. The
company’s last year profits were recorded as RO 20 million.
Assuming that you are the financial manager of the company, what will be your proposal for the sources of finance?
1. Identify five short term and five long term sources of finance. (20 marks)
2. With reference to the above scenario, discuss the three advantages and three limitations of any two short term
and any two long term sources of finance suitable for the given scenario. (70 marks)
Instructions for the assignment:
1. The report should have a table of contents, answers to the questions and appropriate references using Harvard
style and in-text citations are mandatory.
2. The report should be done in Word, font size 12, font style Times New Roman, text color black, colors can be
used ONLY in appendices; main body of the report should be black and white.
3. Last date of submission: 13
th week of the semester
4. The assignment should be submitted on time through Moodle. Late submission shall be penalized as per the
norms of MEC mentioned in the Module Information Guide.
5. Marks awarded in the assessment is provisional till it is approved by the Exam Board
6. A viva – voce may be conducted as per the discretion of the faculty and it carries no marks.
7. Evaluation criteria:
Criteria Marks
Q1: Five short term sources of finance 10 marks
Q1: Five long term sources of finance 10 marks
Q2: Discussion on two short term sources of finance 35 marks
Q2: Discussion on two long term sources of finance 35 marks
Format and referencing 10 marks
Total (assessment weightage 20%) 100marks
Explanation & Answer
Attached.
Running Head: FINANCIAL MANAGEMENT
Financial Management
1
FINANCIAL MANAGEMENT
Contents
Introduction ..................................................................................................................................... 3
Discussion ....................................................................................................................................... 3
Short-term sources of finance ..................................................................................................... 3
Long-term sources of finance ...................................................................................................... 4
Advantages and limitations of short term source of finance ....................................................... 4
Advantages and limitations of long-term sources of finance ...................................................... 5
References ....................................................................................................................................... 7
2
FINANCIAL MANAGEMENT
3
Introduction
A company usually requires large amounts of capital in order to supply. Therefore, it will
constantly need sources of funding to bring out its effective and effective production. The
company can use long-term sources of finance or short-term sources of finance in order to
increase the company's funding.
Discussion
Short-term sources of finance
There are a number of short-term sources of finance for the business. We first have the
trade credit which refers to the credit granted by the suppliers of finished goods, raw material,
and components to traders and manufacturers. There is also the bank credit which is granted by
commercial banks to business firms and companies. The bank credit may be granted in the form...