Business Studies Multiple Choice Question – 15 May 2021

After an excellent year of trading, Stafford Fun Times Ltd plans to triple the size of its business.

Which one of the following is the most appropriate source of finance for this plan?

Select ONE answer:

1. Sale of assets
2. Overdraft 
3. Debenture 
4. Trade credit

Show the workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 3

1. Not correct
2. Not correct
3. Correct – Definition of debentures: medium to long term unsecured loan or bond for a large amount at a specified rate of interest.  Stafford Fun Times will need substantial funds to resource the doubling of the size of the business.  Debentures are used to raise large sums of money and are therefore suitable for Stafford Fun Times planned expansion.
4. Not correct

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