Financial Appraisal Regeneration Through Education Limited (RTE) is a charity organization that has charitable aims of providing adult education courses in a deprived area of Portshampton. In addition, it seeks to provide discounted room letting facilities for clubs in the same area. This charity organization, has recently received a regeneration grant that has enabled it to fund the construction of a purpose built complex of rooms and conference facilities on a site adjacent to its current location. This paper addresses some of the queries that RTE has raised concerning financial risks in transactions, comparison with filing requirements, and reporting research among other things. Query 1: Advance Payments to Suppliers This first query has four major issues and first of all there is a substantial amount of money or deposit that has to be paid on the furniture and fittings for the new building. Secondly the supplier, who is demanding this substantial deposit, is unknown to RTE and has no track record with them. Thirdly, this scenario creates the possibility of financial risks taking place. Lastly, if the transaction is made there will be cash flow implications of providing the large deposit on the charity’s fund reserves. The greatest among these issues is the possibility of financial risks and how they can be minimized. This portion seeks to explain how RTE can minimize the effects of financial risks due to this transaction. According to Horcher (2005, pp. 2-3), financial risks arise through countless transactions, which are of a financial nature. This is to mean that, whenever there is a financial transaction, there are high chances of occurrence of financial risks. These transactions include sales and purchases, loans and i... ... middle of paper ... ...ated companies legislation, Oxford UP, New York, NY. Dawes, AP 2009, Charity accounts: A practitioner’s guide to the charities sorp, 4th edn, Intl Specialized Book Service Inc, Portland, OR. Fabozzi, FJ 2009, Financial risk management, John Wiley & Sons, Hoboken, NJ. Heidenbauer, S 2011, Charity crossing borders: The fundamental freedoms’ influence on charity and donor taxation in Europe, Wolters Kluwer, Bedfordshire. Horcher, KA 2005, Essentials of financial risk management, John Wiley & Sons, Hoboken, NJ. Madura, J 2010, International financial management, 10th edn, South-Western Cengage Learning, Mason, OH. Palmer, P & Randall, A 2002, Financial management in the voluntary sector: New challenges, Routledge, New York, NY. Rezaee, Z 2001, Financial institutions, valuations, mergers, and acquisitions: The fair value approach, John Wiley & Sons, Hoboken, NJ.
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Along such time, the budget has grown over $2000,000, fact that paradoxically left Youth Haven with a deficit of$20,000. Marcel is in the process to upgrade her mindset of for-profit sector molded to the nonprofit sector environment. In addition, an executive director must consider some other factor, even when a nonprofit departs from the way any for-profit business is. In the textbook, Nonprofit Management Principles and Practices, Worth pointed out, “nonprofit managers are confronted with sorting through an array of options and selecting the measures and methods that meet both their own need for useful management information as well as the expectations of funders, watchdogs, and regulators.” (Wroth, P. 161). It is important to understand that administrators of non profits not only have to handle the management side of things but also to make sure that whatever service they are providing to the community is still running
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One of the key areas of long-term decision-making that firms must tackle is that of investment - the need to commit funds by purchasing land, buildings, machinery, etc., in anticipation of being able to earn an income greater than the funds committed. In order to handle these decisions, firms have to make an assessment of the size of the outflows and inflows of funds, the lifespan of the investment, the degree of risk attached and the cost of obtaining funds.
As has been discussed before, risk identification plays an important part in the risk such as unique, subjective, complex and uncertainly. There are no two identical leaves in the world; similar, there are no two exactly the same risk either. Hence the best risk manger could not identify risk completely. Besides, risk identification assessment is done by risk analysts. As the different level of risk management knowledge, practical experience and other aspects between individuals, the result of risk identification may be difference. Furthermore, the process of identifying risk is still risky. Once risks have been identified, corporations have to take actions on limiting risky actions to reduce the frequency and severity of risky. They have to think about any lost profit from limiting distribution of risky action. So reducing risk identification risk is one of assessments in the risk
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