Business Money Matters Quiz
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Questions and Answers

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?

  • 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?

  • 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?

    <p>Inability to cover current expenses and invest in the new business</p> Signup and view all the answers

    What is the purpose of Equity Finance in business?

    <p>To raise capital by selling shares</p> Signup and view all the answers

    Equity finance is the main source of funding for a sole trader of a corner shop.

    <p>False</p> Signup and view all the answers

    Working capital is used for long-term funding in a business.

    <p>False</p> Signup and view all the answers

    Fixed capital is required for purchasing fixed assets in a business.

    <p>True</p> Signup and view all the answers

    It is advisable for a small corner shop business to fund a new business using money from the old shop.

    <p>False</p> Signup and view all the answers

    Working capital is essential for maintaining the daily operations of a business.

    <p>True</p> Signup and view all the answers

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