(1) How is the future, present, and past reflected in terms of interior and exterior finance?

(1) How is the future, present, and past reflected in terms of interior and exterior finance?

Expert Solution

Interior finance reflecting past present and future

Interior financing is the finance generated within the business.
Internal sources are used when the requirement of funding is limited and for the same interior finance or the finance is used only for the main purposes.
Cost of capital in the interior finance is pretty low.
And the interior finance is to limit that the business within a boundary maybe not to grow so big they have to work in with the same they cannot further expand their business with the limited finance.
and the examples of interior finance is retained earning, reserves, profits, assets of the company.

And here in the past they were having the same final to run their business and they earn profit and keep reserves with them and they take a part of their earnings as a retained earning for the future needs and urgency so that they can use it for the future uncertainty and in present they use the same amount for their working capital or the daily operation dates.

Exterior exterior finance reflecting past present and future

The exterior finance is source from the outside of the business and is generated outside the business of the organisation.
Exterior finance is used when the requirement of funding is used it means when the need of the finance is more and the capital with the organisation is less they take the capital from the outside.
The cost of capital is hair medium to pretty High.
Exterior finance is to expand from local to National to global.
Example for the exterior finance is equity financing, debt financing etc.

Hence exterior silence is is a source from which the organisation or companies takes a loan from the outside that they can be internally globally and have to pay the rate of return on the amount taken as a overdraft and have to pay the certain sum for amount of the money within the period decided on the allotted for the payment of installment.

jeff jeffy answered 6 months ago

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