Q. 3 B5.0( 5 Votes )

Answer the following questions, each in about eight to ten sentences.

Explain briefly the purposes for which long term finance is required by business concerns?

Answer :

Long term finances are borrowed or arranged for the expenses that are higher in number. Businesses always need surplus cash to operate efficiently and to handle the bigger change in their organization. Any organization that requires a large amount of cash is for the reasons below

• Development of business


• Modernization


• Production changes or enhancements


• Assets buying


• Research and Development (R&D)


• Establishing new undertaking etc.


Usually, any company sources long term finance when they have insufficient cash but are in need of higher capital to carry out their operations.


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