3.1 Introduction to Finance

Question 1

capital expenditure

Answer 1

finance spent on fixed assets
pros
- add extra production capacity
- improve efficiency

Question 2

fixed assets

Answer 2

items of monetary value that have a long term function used for purpose of production.
land,
buildings,
machinery,
commercial vehicles,
furniture, fixtures and fittings
Computer and IT systems
Intellectual property
M&A

Question 3

Revenue Expenditure

Answer 3

finance spent on the daily operations of a business such as
wages,
salaries,
raw materials,
rent
advertising and promotion
energy costs
freight delivery
office supplies

Question 4

collateral

Answer 4

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