Question 495 differentiate between lease finance and

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Question 49.5 Differentiate between lease finance and hire-purchase and between a factor and a special purpose vehicle. Answer In case of lease finance, the owner receives payment from the user of an asset for a specified lease period, whereas in a hire-purchase scheme the hirer of an asset becomes the owner after the payment of the principal and the interests. A factor is a financial institution to manage and finance credit sales, whereas a special-purpose vehicle (SPV) is a trustee that issues securities against a pool of assets of a company that are transferred to the SPV and whose cash flows are utilized to pay to the holders of these securities. Question 49.6 State the characteristics of a venture capital form of financing.
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Answer Venture capital form of financing is basically equity investment in young, risky, and prospective private companies. Capital is provided by venture capital firms (VCF). They do not need dividend or interest, but they want but need long-term capitalization and increased net worth of the company. Question 50.1 Briefly describe what you mean by entrepreneurship . Answer Entrepreneurship is the professional application of knowledge, skills and competencies and/or of monetizing a new idea, by an individual or a set of people by launching an enterprise do novo or diversifying from an existing one, thus to pursue growth while generating wealth, employment, and social goal. Important features of entrepreneurship are (i) innovation potential, (ii) risk-taking propensity, and (iii) venturing into new business for profit. Question 50.2 Mention five important principles of entrepreneurship. Answer The five important principles of entrepreneurship are the following: 1. Challenge the status-quo. 2. Search for new ideas. 3. Make the product, process, or service simple and understandable. 4. Make the product, process, or service customer based. 5. Work, work, and work. Question 50.3 What is a business plan and what are its contents? A business plan is a written document that details the proposed venture providing a roadmap for the enterprise. It helps the entrepreneur to view the project comprehensively, critically, and objectively and is a communication tool for the external stakeholders. A business plan contains a description of the business, the opportunities in the market, the location of the enterprise, the financial aspects, the risks involved, the management structure, the milestones, and the successor details. Question 50.4
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What considerations are made in feasibility analysis? Answer Usually technical, marketing, financial, organizational capability and competitor analysis are done in a feasibility analysis.
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