BM Unit 3

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hopefully will be till unit 3.8

Last updated 10:35 AM on 6/19/26
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8 Terms

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Capital expenditure

Finance spent on fixed assets/non current assets that have long-term function

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Reasons for capital expenditure

  1. Add extra production capacity as business grows

  2. Improve efficiency by utilizing the latest technologies

  3. Replace damanged and obsolete capital equipment & machinerydamaged

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Revenue expenditure

Finance spent on daily operations of a business, csots associated with day to day operating expenses such as rent and raw materials

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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

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Internal source of finance

Money or funds that come from within the business

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Personal funds (INTERNAL)

Own savings → used to finance start-ups

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Retained profits (INTERNAL)

Profits that a business keeps to use within the organization

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Sale of assets

Selling unused assets