An entrepreneur has limited funds but must maintain quality. Which decision is most balanced?
Answer and explanation
Correct answer: Spend on essential needs
When funds are limited, priority should go to expenses that directly support operations and quality, such as essential materials, equipment, safety, and skilled work. Decoration can wait, while reducing quality may damage trust. Borrowing should follow an assessment of purpose and repayment capacity. Therefore, spending on essential needs is the most balanced decision.
Frequently asked questions
What is the correct answer to this question?
Spend on essential needs
Why is this the correct answer?
When funds are limited, priority should go to expenses that directly support operations and quality, such as essential materials, equipment, safety, and skilled work. Decoration can wait, while reducing quality may damage trust. Borrowing should follow an assessment of purpose and repayment capacity. Therefore, spending on essential needs is the most balanced decision.
Which subject and chapter does this question cover?
This is a Class 12 Business Studies question. Chapter: Financial Management. Topic: Working capital.
