Question: write a discussion post response for the following When a business is buying an operational asset the best way to go would be cash with

write a discussion post response for the following "When a business is buying an operational asset the best way to go would be cash with equipment it will not hurt liquidity. It will also help you avoid interest, not owe anyone and have direct ownership of the equipment. When using cash you should also make sure that you are in a good financial situation at the time. Say you have a steady cash flow from revenue of 200,000 and needed some equipment for 25,000. That would help with revenue and the cash you saved and will receive on this position. The time to use a loan is when there is a low cash flow you will then need the loan to help buy equipment. You would then have to pay interest, but paying off the loan and the return on investment would help preserve cash flow. You also would have a good credit reputation if paid off successfully

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!