Explain how a large manufacturing business could finance investment in new machinery.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

1. [5] The context suggests a significant amount of capital investment.
2. [5] It depends on the assumptions made about the existing financial position of the business – has it significant retained earnings? – has it assets to sell?
3. [5] Internal sources may be limited and insufficient to finance all the expenditure required.
4. [5] Externally the following might be sources of finance:-- Equity finance if a plc. - Bank loans. - Government grants. - Hire purchase/leasing.
5. [4-5] Effective explanation of relevant sources of finance with clear reference to the context of a large manufacturing business/new machinery
6. [2-3] Limited explanation of source(s) of finance for purchasing of capital equipment
7. [1] Understanding of source(s) of business finance
8. [0] No creditable content