However, with internal financing, which means when you take money from your operating budget or capital, it leaves you with less money to manage daily expenses, which will happen to James Clark. In this way, using internal sources of financing for his restaurant and endeavors can compete with budgets already in place. Also, James Clark needs to ensure he has to estimate the amount of money that will be spent on the restaurant on a regular basis and provide an accurate forecast for recoupment of the investment. The accuracy of these calculations depends on how well the James is able to estimate its costs, predict trends and manage the budget outlined. The interest of the restaurant pays on external debt is tax deductible, as is the depreciation
