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hopefully will be till unit 3.8
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Capital expenditure
Finance spent on fixed assets/non current assets that have long-term function
Reasons for capital expenditure
Add extra production capacity as business grows
Improve efficiency by utilizing the latest technologies
Replace damanged and obsolete capital equipment & machinerydamaged
Revenue expenditure
Finance spent on daily operations of a business, csots associated with day to day operating expenses such as rent and raw materials
Collateral
Refers to the financial guarantee offered to secure a loan, ensuring the lender can recover their money if the borrower fails to repay the loan
Internal source of finance
Money or funds that come from within the business
Personal funds (INTERNAL)
Own savings → used to finance start-ups
Retained profits (INTERNAL)
Profits that a business keeps to use within the organization
Sale of assets
Selling unused assets