Companies that choose to venture out on capital projects can utilize current savings, equity, or debt...

50.1K

Verified Solution

Question

Finance

Companies that choose to venture out on capital projects canutilize current savings, equity, or debt as ways to raise theneeded amounts. Each has benefits and limitations which change aseconomic and fiscal policy actions occur in the national andinternational realms. As a result, the company will want to have asolid understanding of these factors and be able to support itschoice. Based on the current economic environment, which of the 3options mentioned above would you recommend to a company financinga 2-year project? A 20-year project? Make sure that you addressrisk tolerance as a significant part of your response.

Answer & Explanation Solved by verified expert

4.0 Ratings (589 Votes)

a company should normally have all the components of financing in the company but proportion of each depends on the current market economic and fiscal policy along with other factors like risk and return debt equity both has its own pros and cons relating to risk return components since a company needs financing for 2 years public See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Companies that choose to venture out on capital projects canutilize current savings, equity, or debt as ways to raise theneeded amounts. Each has benefits and limitations which change aseconomic and fiscal policy actions occur in the national andinternational realms. As a result, the company will want to have asolid understanding of these factors and be able to support itschoice. Based on the current economic environment, which of the 3options mentioned above would you recommend to a company financinga 2-year project? A 20-year project? Make sure that you addressrisk tolerance as a significant part of your response.