Podcast
Questions and Answers
What is the purpose of Fixed Capital in a business?
What is the purpose of Fixed Capital in a business?
- To expand the business
- To build and fit out the shop (correct)
- To pay for overheads like rates and electricity
- To maintain daily business operations
What is the primary use of Working Capital in a business?
What is the primary use of Working Capital in a business?
- To acquire long-term funding
- To buy stock and pay daily expenses (correct)
- To expand the business
- To maintain fixed assets
Why is it highly likely that a small corner shop business will fail if they use money from the old shop to fund a new business?
Why is it highly likely that a small corner shop business will fail if they use money from the old shop to fund a new business?
- The old shop will be left with no funds
- Cash flow will be insufficient to pay current employees and buy new stock (correct)
- The new business will not succeed
- The old shop will lose its value
What is the main concern associated with funding a new business solely with the money from the old shop?
What is the main concern associated with funding a new business solely with the money from the old shop?
What is the purpose of Equity Finance in business?
What is the purpose of Equity Finance in business?
Equity finance is the main source of funding for a sole trader of a corner shop.
Equity finance is the main source of funding for a sole trader of a corner shop.
Working capital is used for long-term funding in a business.
Working capital is used for long-term funding in a business.
Fixed capital is required for purchasing fixed assets in a business.
Fixed capital is required for purchasing fixed assets in a business.
It is advisable for a small corner shop business to fund a new business using money from the old shop.
It is advisable for a small corner shop business to fund a new business using money from the old shop.
Working capital is essential for maintaining the daily operations of a business.
Working capital is essential for maintaining the daily operations of a business.
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