SSC MCQ Question Ans. Sources of Finance. Finance means fund collection, its management, and distribution. In this chapter, we will learn about the concept of the sources of finance for doing the fund collection activity efficiently. Different sources of finance have different features. For these different features, the fund should be collected from different sources suitable for different situations of the business. For example, to purchase a fixed asset fund should be collected through share selling. Again, to meet the daily needs such as raw materials purchase, credit purchasing can be used or short-term bank loan can be utilized.
SSC MCQ Question Ans. Sources of Finance
The fund required for the purpose of starting any business or to conduct the daily activities of the business, selection of the sources of finance is one of the important decisions in financial management. Because different sources have different costs of capital and the sources of different terms have different advantages and disadvantages. An institution collects fund by analyzing different sources to select that mixture of sources which will provide maximum benefit and minimum cost. The main objective of the investment is profit earning. We can get net profit by subtracting the cost of capital and tax from the total profit. So, the cost of capital should be reduced to maximize the profit of the business.
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