SSC MCQ Question Ans. Cost of Capital

SSC MCQ Question Ans. The cost of Capital. Every business enterprise has its own cost of capital. The cost of capital means the cost of funds gathered from different sources. Usually, the expected income of the finances is considered as the cost of capital of the organization. A business enterprise collects its necessary fund from different sources. The costs of capital of different sources are not equal. So, the cost of capital of each of the sources needs to be calculated separately. In this chapter, we shall be able to know about the cost of capital, the importance of calculating the cost of capital, calculating the cost of capital of different sources of fund and other related things.

SSC MCQ Question Ans. Cost of Capital

After the investment decisions of the three friends mentioned in the previous chapter, such as, – Rahim’s buying a fridge, Karim’s buying a sewing machine and Sankar’s buying a wheelchair and a hair cutting machine – they have to finance these investments.  You have learned that there are many sources of financing, like the – own capital of the owner, loan from friends, bank loan, the loan from other financing organizations, etc.

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