US car giants seek $21bn funding

The numbers keep going up!

GM and Chrysler are asking for more money from the US Government again. Read this BBC article and answer the following questions:


Level 1: Knowledge
1a) Complete this statement:
The loans that GM is asking for are classed as an __________source of finance because they will provided by stakeholders outside of the business. According to the article, they may also be classed as a __________ term source of finance, because they are expected to be paid in 8 years (2017).

1b) What is working capital? Why is it important to a business?

Level 2: Application
2a) Construct a table describing the plans outlined by both GM and Chrysler.
2b) Explain how Chryslers debt management plan will impact its working capital.

Level 3: Analysis
3) Using the information in the article , analyse the likely impact on key financial statements for either car company.

Level 4: Evaluation
Justify your choice of 1 additional source of finance for either car company.

Stuck? Click here for some ideas!

Note Level 1 – Level 4 are questions based on IB standards where

Level 1: Knowledge
Level 2: Application
Level 3: Analysis
Level 4: Evaluation

Words in bold (define, explain…) have a specific meaning in the IB Diploma Program (DP). The meanings are in Glossary of Command Terms Section of the IBO DP Business and Management Guide available at the OCC and from my website