Practicing Success
Finance is required in business to buy which of the following fixed assets ? A. Raw material B. Plant & Machinery C. Labour D. Building E. Furniture & Fixture Choose the correct answer from the options given below : |
B, D and E only A, B and C only C, B and E only C, B and D only |
B, D and E only |
The correct answer is option (1) : B, D and E only Finance is required in business to buy the following fixed assets : 1. Plant & Machinery 2. Building 3. Furniture & Fixture So, the correct answer is : 1. B, D and E only Finance is essential in business to acquire various assets, especially fixed assets, which are crucial for the operations and growth of the business. Here's an explanation of why each of the selected assets requires finance: 1. Plant & Machinery: Plant and machinery are essential for the production process. Businesses need to invest in machinery and equipment to manufacture products efficiently and effectively. This requires a significant financial investment to purchase, install, and maintain these assets. 2. Building: Building refers to the physical infrastructure, such as factories, offices, warehouses, and retail spaces. Acquiring or constructing a building is a substantial financial commitment for a business, and it provides the necessary infrastructure for the business's operations. While raw material, labor, and other operational expenses are critical for running the day-to-day operations of a business, they are not classified as fixed assets. Instead, they are considered part of the variable or operating expenses required for the production process. Fixed assets are long-term investments that provide a foundation for the business's operations and growth. |