Page 155 - 5.2 i. Manac Finance ITC Summarised Notes

THE FINANCING DECISION

Financing decision

5. Matching:

• The expected cash inflows from the investment and

the financing cash outflows.

• In addition to this the useful life of the asset and the

payback period of the finance should match. Long

term projects should be financed though long term

borrowings where are short term investments should

be financed through short term borrowings.

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