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Which of the following best matches source of finance to business purpose? (A) Increasing bank overdraft to buy a delivery van (B) Applying for a government grant to pay creditors (C) Using retained earnings to expand into new markets (D) Selling accounts receivable to replace furniture and fittings - HSC - SSCE Business Studies - Question 16 - 2008 - Paper 1
Question 16
Which of the following best matches source of finance to business purpose? (A) Increasing bank overdraft to buy a delivery van (B) Applying for a government grant to... show full transcript
Worked Solution & Example Answer:Which of the following best matches source of finance to business purpose? (A) Increasing bank overdraft to buy a delivery van (B) Applying for a government grant to pay creditors (C) Using retained earnings to expand into new markets (D) Selling accounts receivable to replace furniture and fittings - HSC - SSCE Business Studies - Question 16 - 2008 - Paper 1
Step 1
Using retained earnings to expand into new markets
Answer
The best match of source of finance to business purpose is (C) Using retained earnings to expand into new markets. This option indicates utilizing profits that have been reinvested into the business to fund expansion efforts. Retained earnings provide a straightforward and internally sourced method for financing growth, reducing the need for external debt or grants.