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Explain the Following as Factor Affecting 'Financing Decision'. Cash Flow Position of the Business

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Question

Explain the following as factor affecting 'financing decision'.

Cash flow position of the business

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Solution

Cash flow position of the business: Debt should be opted by the company only if it has a strong cash flow position. This is because cash would be required to repay the principal along with the interest rate on the debt.

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2013-2014 (March) Delhi Set 3

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