question archive Anthony Cruz who owns the Zapatoes Inc
Anthony Cruz who owns the Zapatoes Inc
Subject:FinancePrice:4.87 Bought7
Anthony Cruz who owns the Zapatoes Inc. wants to expand his operations by opening his first production facility. However, he needs Php10 million to finance the expansion. The problem is where he will get the funds needed and he has three options:
1. Accept a Php10 million-equity investment from his friend Alex but he will holds 45% ownership of the business afterwards. He does not demand any specific return.
2. Short-term loan for 1 year for Php10 million at 6% per annum from Shortime Bank.
3. Long-term loan for 5 years for Php10 million at 10% per annum from Longly Bank.
He is confident that his sales volume will grow for the next 5 years but it is tainted by his uncertainties over the possible effects for the opening of his new production facility. What must he do?
