Practice Types Of Capital (6) - Business Size and Finance

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9 questions

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Exercise
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Quiz
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6 sample questions

Question 1.
Define fixed capital.
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Think about what types of purchases are made for the long haul.
Question 2.
What does working capital cover?
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Consider daily operations when thinking about this.
3Question 3.
What is fixed capital?
- Short-term funds
- Long-term investments in assets
- Daily operational expenses
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Think of assets that last for several years.
4Question 4.
Working capital is needed for which of the following?
- Land purchases
- Salaries and raw materials
- Machinery upgrades
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Consider regular bills and costs.
Question 5.
A company needs $50,000 for purchasing new machinery (fixed capital) and $20,000 for monthly operational costs (working capital). How should they balance their finances?
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Think about short-term vs. long-term financing strategies.
Question 6.
What would happen if a business neglects its working capital needs despite having significant fixed capital?
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Consider the importance of liquidity in business.

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