This slide show complements the learner guide NCV 4 New Venture Creation Hands-On Training by Bert Kirsten, published by Future Managers Pty Ltd. Visit our website at www.futuremanagers.net
13. TIME WHEN MONEY IS NEEDED Before starting to set up Setting up before opening Ongoing once opened Renting space to work from Receipts Renting furniture and equipment Receipts Buy furniture and equipment Quotations Water deposit Quotations Electricity deposit Quotations Telephone deposit Quotations Rent of actual business premises Preliminary agreement Preliminary agreement Salaries & Wages Preliminary agreements Preliminary agreements Your salary Receipts Preliminary agreements Preliminary agreements Buy supplies & stock Receipts Quotations Estimate based on predicted usage Transportation costs Receipts Estimate based on predicted usage Estimate based on predicted usage Water Receipts Estimate based on predicted usage Estimate based on predicted usage Electricity Receipts Estimate based on predicted usage Estimate based on predicted usage Telephone Receipts Estimate based on predicted usage Estimate based on predicted usage Business registration costs (Licences, etc); Quotations (Annual)
31. Simple interest loan paid at the end of the period in one lump sum R100 000 R136 000 0 1 2 Loan R100 000 Interest rate 18% per annum Method Simple interest Period 2 years Repayment R136 000 at end of year 2 Total interest paid R36 000
32. Compound interest paid off in two equal amount at the end of each year R100 000 R63 872 0 1 2 R63 872 Loan R100 000 Interest rate 18% per annum Method Compounded annually Period 2 years Repayment R63 872 at end of year 1 & 2 Total interest paid R27 743
33. Compound interest paid off in equal amount at the end of each month R100 000 0 1 2 Loan R100 000 Interest rate 18% per annum Method Compounded monthly Period 2 years Repayment R4992 at end of each month Total interest paid R19 818
34. Compound interest paid off in equal amount at the end of each month R100 000 0 1 2 Loan R100 000 Interest rate 18% per annum Method Compounded monthly with additional lump sum at the end Period 2 years Repayment R3 246 at end of each month Total interest paid R27 909
54. 5.1.3 Capital structure Debt Equity Interest is a cost of doing business and can be deducted when calculating tax Rewards to investors are not tax deductible Not an ownership issue and lenders have no say in how the business is run Is an ownership issue and investors can have a say in how the business is run Creditors have legal rights if they are not paid back interest Investors do not have legal rights to be paid dividends Too much debt can lead to financial distress or even bankruptcy