Question

Parker needs money to expand the warehouse. By expanding the warehouse the company will be able to carry a lot more inventory, which will make it possible for them to fill more customer orders much more quickly. This expansion will cost approximately $150,000 in construction costs. Purchasing the additional inventory will cost $50,000. Over the next two years Parker believes this will increase sales 20% and profitability 25%. What type of financing should Parker seek?

Answer 1

Answer:

bank credit

Explanation:

A bank credit is money that is collected from a bank or financial institution that is determined by the ability of the person to repay the loan and the total money the bank has available to pay.

The bank calculates the ability of the person to pay back a certain percentage of the loan over a particular period before disbursement.

In the given scenario Parker's expansion will cost approximately $150,000 in construction costs. Purchasing the additional inventory will cost $50,000. Over the next two years Parker believes this will increase sales 20% and profitability 25%.

The bank will verify the efficacy of these projections and give the loan to Parker