Practicing Success

Target Exam

CUET

Subject

Entrepreneurship

Chapter

Business Arithmetic

Question:

Money needed to find the normal day to day operations of a business is:

Options:

Working Capital

Shareholders funds

Depreciation

Interest

Correct Answer:

Working Capital

Explanation:

The correct answer is option (1) - Working Capital.

Money needed to fund the normal, day to day operations of a business is known as the Working Capital. It ensures you have enough cash to pay your debts and expenses as they fall due, particularly during start-up period as very few new businesses are profitable as soon as they open their doors. It takes time to reach breakeven point and start making a profit.