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Which of the following means of funding a business is very reliable and cheap?

Economics
WAEC 2019

Which of the following means of funding a business is very reliable and cheap?

  • A. Bank loans
  • B. Loans from friends
  • C. Plough back profits
  • D. Debentures
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Correct Answer: Option C
Explanation

Plough back profits also known as retained earnings are profits earned by a business, and reinvested in the business. What this means is that the business doesn't spend its profits, but put it back in the business. It is considered one of the cheapest sources of business financing as it does not require interest to be paid.


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WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
NECO June/July 2024 - Get offline past questions & answers - Download objective & theory, all in one app 48789
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WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
NECO June/July 2024 - Get offline past questions & answers - Download objective & theory, all in one app 48789
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts