Question

Suppose a company receives a windfall of cash. What factors should the board of directors consider when deciding how to allocate the newly found capital? minimum 150 words

Answer 1

The sudden windfall of cash in a company is a rare moment and the money should wisely used by the directors

mostly the directors keep the windfall cash inside rather than giving that as a divident or shares.

the factors to be considered as follows

• Consider the loss making business areas

loss making business areas to be found and needed fund is to be allocated for a better performance in the future

• business expantion

​​​​​​​ new projects is to be introduced for a sustainability in the market and money is to be invested in company goals

• repayment of debt

the creditors is to be settled and debts needed to be settled immediatly to waive the interest.

• employers satisfraction

employers needed to be well satisfied with the new company policy ,by giving them leasure trips and bonus this can be obtained

• investment strategies

​​​​​​​ investment plans in financial markets for a higher return and capital growth in company

• access the tax implication

​​​​​​​ tax implications are attracted and tax planning should be done.