December 7, 2012
This paper will focus on Acme looking how to increase funding for Greenfield investment abroad, and how multinational enterprise funding can be very demanding and complicated process. Acme will be looking at the various internal sources of funding like accounts receivable, inventory reduction, line of credit, mortgages loans, well as short term loans and equity offering.
With the variety methods of funding that can be done to attained conservative loans. The MNE main focus is on external sources; which it explore growth capital, equity offerings, bank loans, lines of credit and mortgages (Brigham & Ehrnhardt, 2011). The internal source focuses on debentures, lines of credit, and long/ short term loans. Long Term Loans
Long term loans are a loan that required repayment in a series over one or more years and can be repaid annual, semi-annual or monthly payment. The purpose of long-term loans is when business needs to make capital improvement for example, buying large pieces of equipment for manufacturing process. Many long term loans can be setup so that the interested rate can vary according to the market. Which allow businesses to better manage their short term resources without occurring obscurity; in addition, they will be able, to extend the cost of the project as company negotiate a fixed interest rate. It should be denoted that these funds that the interests accrues are tax deductible and will reduce the company’s equity, as well. In regard to long term loan repayment, it is important that the company understand how much monies they can afford to pay back according to type of loan they have chosen. The investors must be comfortable with the type of loan they enquire such as i.e. balloon, equal principal payments, and annual or semi-annual. One of the largest disadvantages of this type funding it requires that company provide collateral; which could have barring on the company resources until the loans...