Question

As a private limited firm dealing with garment manufacturing, you have little cash in hand but considerable business potential. You suddenly get

an order to deliver 1,000 shirts at a price of $50 each. You have the entire infrastructure in place, but need $15,000 to procure the fabric and

accessories for shirts. How will you raise money to serve this order? How will the answer differ if the business is a sole proprietorship?

Answer 1

Bank loans

Financial institutuions loans

Creditors

Step-by-step explanation:

A private limited company depends on its retained earnings or assets . The other option available is that of getting financed through bank loans or other institutions serving as creditors to invest and the company may record the loan as accounts payable or long term loan which ever is possible.

The same would be for the sole proprietorship because it can even generate funds through bank loans or creditors.

In case of the public limited company the it would be different as it can raise funds through issuing new shares.