Question 1
Evaluate the relative arguments for a firm choosing between internal and external sources of long-term
finance. Illustrate your answer with analysis of at least two
examples of external sources of finance.
750 words maximum
Question 2
Cash is King”. Using recent developments in the economy of the UK, explain why managing cash is a
fundamental concept of business finance. Use references where appropriate and your answer should give
examples where a lack of cash has been a contributing factor. Your answer should include:
I. Identification of a business or business sector that has failed due to cash flow difficulties, providing an
evaluation of the issues. Also note if there were any other underlying business issues in addition to cash
shortage.
II. Analysis of the impact of the operating cycle and why it is such an important factor in business success,
applying it to the business or business you have selected.
III. Evaluation of any recommendation you could make on what the business or business sector could have
done differently to result in a possibly more successful outcome.