1. Capital allocation process The capital allocation process involves the transfer of capital among different entities...

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1. Capital allocation process The capital allocation process involves the transfer of capital among different entities that include individuals, small businesses, banks, financial intermediaries, companies, mutual funds, and other market participants. In a developed market economy, capital flows freely between entities that want to supply capital to those who want it. This flow of capital can be classified in three ways. In the table below, identify the nature of capital transfer given in the scenario with its appropriate classification: Scenario Citibank issues a loan to Jennifer for the expansion of her flower delivery business. A small startup firm has each of the partners contribute $50,000 in capital to help the company make payroll for the next three months. Steve's grandfather loans him $30,000 to start a small coffee shop in the East Village in Manhattan. W2 Corp. needs capital to finance a new product line. It borrows money in the form of long-term bonds underwritten by an investment bank. Direct Transfers Indirect Transfers through Investment Indirect Transfers through Banks Financial Intermediaries 1. Capital allocation process The capital allocation process involves the transfer of capital among different entities that include individuals, small businesses, banks, financial intermediaries, companies, mutual funds, and other market participants. In a developed market economy, capital flows freely between entities that want to supply capital to those who want it. This flow of capital can be classified in three ways. In the table below, identify the nature of capital transfer given in the scenario with its appropriate classification: Scenario Citibank issues a loan to Jennifer for the expansion of her flower delivery business. A small startup firm has each of the partners contribute $50,000 in capital to help the company make payroll for the next three months. Steve's grandfather loans him $30,000 to start a small coffee shop in the East Village in Manhattan. W2 Corp. needs capital to finance a new product line. It borrows money in the form of long-term bonds underwritten by an investment bank. Direct Transfers Indirect Transfers through Investment Indirect Transfers through Banks Financial Intermediaries