Problem
A. What are retained earnings and why they are used as the main source of finance for most companies?
B. Besides retained earnings, briefly explain the other three major methods of internal sources of finance.
C. Explain three factors why borrowings are preferred as a source of finance.
D. Describe three factors why finance lease is growing in popularity.
E. Give two reasons why bank overdraft is a popular source of external financing.
F. Explain the four factors would a finance manager consider to decide whether short term or long term financing is more appropriate.