3.1 Introduction To Finance

Question 1

Capital Expenditure

Answer 1

Investment spending on fixed assets, such as the purchase of machinery, equipment, land and buildings

Question 2

Collateral

Answer 2

The financial guarantee for securing external loan capital to finance investment expenditure for business growth

Question 3

Fixed assets (non-current assets)

Answer 3

Items of monetary value that have a long-term function for businesses, so can be used repeatedly for the purpose of production

Question 4

Revenue expenditure

Answer 4

Spending on the day-to-day running of a business, such as payment of rent, wages, salaries and utility bills