Chapter 3.1 - Introduction to finance

Question 1

Capital expenditure

Answer 1

Refers to investment spending on fixed assets, such as the purchase of machinery, equipment, land, and buildings

Question 2

Collateral

Answer 2

Refers to 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 they can be used repeatedly for production

Question 4

Revenue expenditure

Answer 4

Refers to spending on the daily operations of a business
(payment of rent, wages, salaries, utility bills)