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Internet Service Provider, ISP Corporation

Detailed guidance to answer these questions is given in the solution:
6. ISP Corporation is an Internet service provider. How can ISP obtain capital to finance its operations? Discuss the different options.

7. With a couple of new ideas regarding software design, Carol and Ray start a partnership that, with business success, becomes Pacific Applications Company. The company grows to include a staff of twenty-one employees. Over time, Pacific develops a new computer operating system. The firm signs licensing contracts with several computer manufacturers, but needs to double the number of its employees to fulfill those contracts. Is Pacific subject to federal antidiscrimination laws? If so, what should it consider in hiring new employees? Discuss.

8. Mark agrees to act as Nora's agent for the purpose of investing Nora's money. Mark violates his duty to Nora by depositing Nora's money into his own account and spending it. Discuss all remedies that are available to Nora.

9. Earl obtains a mortgage on his home from First National Bank. Earl defaults on his mortgage payments, and First National brings a foreclosure action against him. Before the house is sold, can Earl prevent the sale and reclaim his home? Discuss.

10. Lee's Will provides for a distribution of Lee's property. Who is the person in charge of doing these things, and what are all of the steps involved? Discuss.

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6. ISP Corporation is an Internet service provider. How can ISP obtain capital to finance its operations? Discuss the different options.

ISP Corporation as the name suggests is a corporation and as such corporates are able to raise only a small percentage of its financial requirements through internal sources, like the owners fund or funds from friends. The rest has to be from external sources. The requirements of the corporates being of two types, namely, short-term and long-term, the nature of finance required also is of same two types. If ISP needs to grow it must have capital from external sources or market sources. New issues and old securities that are traded in the market are a major source of funds for ISP. In addition, ISP can borrow from financial institutions and commercial banks. The other common sources of funds that ISP can explore are deposits from the public and fresh issue of shares to existing or new shareholders.
We are not told when ISP is requiring funds. Usually at the time of setting up of operations, undertaiking of new activities, expansion plans and permanent working capital requires long term finance. These necessitate long term funds and these are financed from financial institution, banks(term loans), issue of shares( either equity or preference), issue of debentures or bonds or accepting deposits from the public. If ISP has been in business for some time, it can plough back its profits.
If the need for ISP is to meet its short term needs like paying for the day to day running of the service, paying salaries, bills and consumables. Then it needs to get short term finance for working capital. A line of credit from a bank, bank overdraft or reducing the length of the cash cycle are methods that can be used by ISP.

7. With a couple of new ideas regarding software design, Carol and Ray start a partnership that, with business success, becomes Pacific Applications Company. The company grows to include a staff of twenty-one employees. Over time, Pacific develops a new computer operating system. The firm signs licensing contracts with several computer manufacturers, but needs to double the number of its employees to fulfill those contracts. Is Pacific subject to federal antidiscrimination laws? If so, what should it consider in hiring new employees? Discuss.

You see once Pacific employs 20 or more ...

Solution Summary

Investment, mortgage, distribution of property and the need to raise finances. These are the topics covered in the five questions presented.

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