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SOLAS Ltd is considering purchasing a new electric or hybrid sales vehicle - Junior Cycle Business Studies - Question 9 - 2015
Question 9
SOLAS Ltd is considering purchasing a new electric or hybrid sales vehicle. a. Tick (✓) the most suitable source of finance that might be used to purchase this vehi... show full transcript
Worked Solution & Example Answer:SOLAS Ltd is considering purchasing a new electric or hybrid sales vehicle - Junior Cycle Business Studies - Question 9 - 2015
Step 1
a. Tick the most suitable source of finance
Answer
The most suitable source of finance for purchasing an electric or hybrid sales vehicle is the 'Medium term' option. This type of financing aligns well with the expected lifespan of the vehicle and allows for manageable repayment schedules.
Step 2
b. State one reason for your choice
Answer
The loan will be paid back within 5 years, which is suitable for the normal depreciation period of a sales vehicle. Additionally, the interest rate is generally lower on medium-term loans compared to credit cards, making it a more economical choice for financing.