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Why does a small enterprise need capital?

Answer and explanation

Correct answer: To start the business and manage its day-to-day operations

Capital finances both the establishment and operation of an enterprise. Initial or fixed capital may be used for equipment, premises, licences, and setup, while working capital supports wages, utilities, raw materials, transport, and inventory during daily operations. Without sufficient funds, even a promising business may be unable to begin or continue smoothly.

Related tags

Business FinanceWorking CapitalConceptNature And Importance Of Business FinanceConcept Nature And Importance Of Business FinanceSources Of Business FinanceBusiness StudiesClass 11 Mcq

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