United Arab Emirates. Keywords: which of the, following, is an example, of a capital resource, coal, loom, time, horse, goods, resources, products, equipment. Explain. A. We feature Viva, interview and multiple choice questions and answers Engineering, finance and science students.. The term Capital Investment can be applied to two different segments - (i) Money or investment by a business to purchase land, machinery or buildings (sometimes it can be applied to replacement of equipment if it crosses a certain financial threshold). d. All of the above are examples of capital investment projects. Recommended Jobs. Capital expenditure is the money a company spends to buy, maintain or improve its fixed assets. Which of the following below is an example of a capital expenditure? A.) Preferred stock. d. All of the above are examples of capital investment projects......is......right........ Bayt.com is the leading job site in the Middle East and North Africa, connecting job seekers with employers looking to hire. Weighted average cost of capital = 15,100/1,30,000 x 100 = 11.61%. Which of the following is an example of capital? Terms of Use - Long Term Debt is $1,00,000, and Short Term Debt included in the Current Liability above is $25,000. The Market Value of the same would be $50,000. Multiple Choice . Register now In this case, the Net Working Capital of PQR Limited as per the Balance Sheet view would be $110,000 which is a positive for the Company, however since the Market Value of Inventories as provided in the Example above has been declined to $ 50,000, this should be considered the Actual Recovery price of Inventory. ****************************************************************************************. Working Capital refers to the Funds available with the Company to meet its day to day Business operations. Social studies . However, the Current Ratio of the Company is slightly below the industry average of 2, which the Company needs to improve in the future. bank depositors bondholders In this case, the Gross Working Capital will be $10,00,000. $2 million will be raised by issuing debt? Which of the following is an example of capital as an economic resource? The following … Further Temporary WC of ABC Ltd is also positive, which is a good sign. A barrel of crude oil C. A registered nurse D. A share of corporate stock E. A bachelor's degree Further, it is also not advisable to lock a huge amount of Funds in the Working Capital Cycle since there is a cost attached to it. (ii) Money or investment in a business which would be used to purchase fixed assets rather than used to cover the business's day-to-day operating expenses.Option (a) can be a capital investment as mentioned in definition (i) but it isn't clear whether it crosses a certain financial threshold. Commercial paper. In this case, although the Net Working Capital is positive, i.e., $110,000 on paper, in reality, this would not be the true picture since $75,000 is considered as Bad & Doubtful of Recovery. a. cleaning the carpet in the front room b. replacing all burned-out light bulbs in the factory Here, Gross Working Capital = Current Assets of the Company = $5,00,000, Permanent Working Capital = Fixed Assets of the Company = $1,00,000, Calculation of Net Working Capital is as follows –. [03.06] Which investment produces a $5 hourly profit for a candy shop earning $1 profit per pound of candy? CFA® And Chartered Financial Analyst® Are Registered Trademarks Owned By CFA Institute.Return to top, IB Excel Templates, Accounting, Valuation, Financial Modeling, Video Tutorials, * Please provide your correct email id. A. The following are its main functions: Supply of Raw Materials: Capital supplies raw materials. A. , AL DOHA Company. Functions of Capital: Capital is valued for the very useful functions it performs in the production of wealth. b. Which of the following would be an example of knowledge capital? Favorite Answer. However, the NWC of the Company would be (-$5,00,000 ) since the Current Liabilities are more than the Current Assets of the Company. Which of the following best describes this transaction? Which ratios would a potential long-term bond investor be most interested in? Fixed Assets are $ 1,00,000. It is an indicator of the Short Term Financial Strength of the Company and signifies the capability to meet the Current Liabilities and Debt Obligations due within one year. Which of the following regarding enterprise resource planning (ERP) is true? b. Who receives income from capital in the United States? Calculate the WC of the Company. Solution: Here, Gross Working Capital = Current Assets of the Company = $5,00,000 Permanent Working Capital = Fixed Assets of the Company = $1… Hence the Company should strategically plan the. Knowledge of the great American authors _________ is most closely associated with the concept of the sociological imagination. C. Payment of salary. Below are some of the ways that social capital can benefit communities. By closing this banner, scrolling this page, clicking a link or continuing to browse otherwise, you agree to our Privacy Policy. b) New companies can access large amounts of upfront capital that does not have to be repaid, as a loan would be. Here we discuss its meaning and the various examples of working capital to understand it better. b. bulldozers.  c. Development of employee training programsÂ. An example is a purchase of a foreign trademark by a U.S. company. … Answer. A) parking lot B) cardboard sale signs C) pens and markers D) handheld calculator. The three different types of resources are – 1. Login details for this Free course will be emailed to you, This website or its third-party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy. It includes labor, capital, and land but does not include goods and services. A.  d. All of the above are examples of capital investment projects. A cement mixer B. (i) the gas tanks and pumps (ii) the service attendants' time (iii) the plot of land on which the station sits (i) only. Source of funds Amount ($) Proportion After tax cost % B) financial capital. taxes. A firm must raise $10 million dollars in funding for a capital investment project. Before going further in Capital Resources, let us have a brief understanding of the other types of resources as well. A. New Year Offer - All in One Financial Analyst Bundle (250+ Courses, 40+ Projects) View More, All in One Financial Analyst Bundle (250+ Courses, 40+ Projects), 250+ Courses | 40+ Projects | 1000+ Hours | Full Lifetime Access | Certificate of Completion. Problem 2. Which of the following is most appropriate hurdle or discount rate for evaluating investment projects: A company is having some profitable investment projects with positive NPV to invest in. ... What is the original capital and capital earned money ? What are some examples from your own community? Circulating capital can consist of cash, operating expenses, raw materials, inventory in the process, finished goods inventory and accounts receivable. XYZ Limited has Current Assets of $2,00,000 and Current Liabilities of $ $90,000. A similar example is a U.S. oil company’s acquisition of drilling rights to an overseas location. CFA Institute Does Not Endorse, Promote, Or Warrant The Accuracy Or Quality Of WallStreetMojo. The amount of workers who work in a Nike factory B.) Privacy Statement - Hence, it forms a major component for analyzing the Financial position of the Company and compare it with peers. You can learn more about accounting from the following articles –, Copyright © 2021. [03.06] Which of the following is an example of a capital investment? Fixed Assets are $ 1,00,000. to join your professional community. In the above example of working capital, ABC Limited has a Strong Working Capital to meet its Short Term as well as Long Term Financial needs. Without human capital, the producer can not manufacture goods and services. In fact, production would almost come to a stand-still without adequate and suitable supply of capital. Which of the following would be an example of a mandated capital budgeting decision. Related questions. a. pizza ovens. The management of the Company would have to sell the Inventory as early as possible in order to maintain the Liquidity. PQR Limited has Current Assets of $2,00,000 and Current Liabilities of $ $90,000. e. Money market mutual funds. Explore answers and all related questions . The capital account includes international transfers of ownership. A) Education B) Natural resources C) Machinery D) Training E) Money. 1.machines 2.raw materials 3.money 4.none of these' and find homework help for … B. Get Fresh Updates On your job applications, and stay connected. We have step-by-step solutions for your textbooks written by Bartleby experts! Social capital is the value that comes from social networks, or groupings of people, which allow individuals to achieve things they couldn't on their own. Purchases of land & buildings. But if the company doesn’t have the building, it wouldn’t be able to run the production process. A fixed capital example would be that if a firm invests in a building where the production process will take place, it would be referred to as fixed capital. Which of the following is not considered to be an appropriate form of finance for capital investment projects? Calculate the Working Capital of the Company and analyze the same. This has been a guide to Working Capital Examples. C) physical capital. December 26, 2019 Dhruma Jacob. A negative working capital puts the Company in tremendous Stress since the Company is not in the position to pay off its Day to Day obligations due to Liquidity issues. or log in e. all of the above. In other words, there is no "expansion of production facilities". Natural Resource 3. asked Jan 8 in Business by hquerns. a. However, this does not imply that purchases to sustain operations would not qualify as capital investments.Option (b), on the other hand, completely fulfills the criteria of Capital Investment since it would involve purchase of additional machinery and/or buildings and/or fixed assets. sources of funds used. A Strong Working Capital Cycle gives the Company the Cushion to perform the Business operations of the Company smoothly. Which of the following would be an example of human capital? Purchases of machinery. In true sense, the Net Working Capital will have to be adjusted with the Accounts Receivable portion to work out the Revised Net Working Capital of XYZ Limited as this will impact the Strategic Decision making of the top management. Expansion of production facilities is correct answer, The correct answer is (b) Expansion of production facilities.Capital investment projects are also known as Capital Expenditure (CAPEX) projects in most companies. Justification for the correct and incorrect answer: A. 1. Which of the following would be an example of a capital expenditure for a superstore that specializes in outdoor grills and other items needed for outside dining? oil. Suppose ABC Limited has Current Assets $ 5,00,000 and Current Liabilities of $ 300,000. Why should a training needs assessment(TNA)t be done before implementing any employee training exercise . Calculate the Working Capital of the Company and analyze the same. Accounts receivable of$ 75,000 included in current Assets are declared as Bad Debts and shall be written off to the Profit & Loss Account next year. Relevance. stocks. Because – Firstly, the building will not get directly consumed by the production process. 1 decade ago. Example: Option (a) and (c) are considered to be operating investments or operations expenses (OPEX) since it supports current operations and does not expand/develop or change the business strategy/segment in terms of location etc. © 2000-2021 Bayt.com, Inc. All Rights Reserved. Labor is an important factor of production. D) financial labor. Money markets Answer: e Diff: E 8 Human Resource 2. Which of the following would be an example of cultural capital? So on paper, the WC of the Company may look Good in the Short Term; however, it may have a significant impact if the Inventory is not Sold and becomes obsolete. Which of the following would be an example of capital for a retail gasoline station? Answer Trivia - VivaQuestionsBuzz is an instant answer provider. Which of the following is an example of a capital input? It involves an ongoing process for implementation B..It can incorporate improved, reengineered “best processes” C. It has a software database that . computer. 2 Answers. No4 is the best answer............................  ***(d)-All of the above are examples of capital investment projects. c) Venture capital is typically easy … Each example of the  Working Capital below states the topic, the relevant reasons, and additional comments as needed. Human capital and social capital augment the purely economic rationale behind capital and together better explain how business and economic growth really work. Suppose ABC Limited has Current Assets of $10,00,000 and Current Liabilities of $15,00,000. Cookie Policy, Question added by Emad Mohammed said abdalla , ERP & IT Software, operation general manager . Note that net annual profit excludes depreciation. Hence the Revised Net Working Capital would be ($2,00,000 – $1,50,000 + $50,000 ) – $90,000 = $1,00,000. Which of these is an example of capital resource? Stocks and bonds are examples of: A) natural resources. ***** is the answer. Questions in other subjects: Mathematics, 02.11.2019 03:31 Labor: This option is incorrect. D. All of the above. A) a powerful political figure wants a manufacturing facility to be located in his district B) a solar arr installs landscaping to reduce objections from near-by residents The following working capital example provides an outline of the most common sources of working capital. Working capital refers to the amount which the company requires with the purpose of financing the day to day operation and example of which includes the working capital of $100,000 with a manufacturer which is calculated by subtracting current liabilities of $200,000 from the current assets of $300,000. Which of the following is an example of a capital investment project? You will Learn Basics of Accounting in Just 1 Hour, Guaranteed! A fir m has the following capital structure after tax costs for the different. Project Manager. The factor of production is important for producing the goods. Circulating capital is frequently referred to as working capital or alternatively, revolving capital. Capital Resource , AL DOHA Company, Answer added by kanchana sridevi, Accounts And Audit Assistant , bv rao and co, Answer added by Hasnat Noor Chowdhury, Business Development Manager (Geocycle) , LafargeHolcim Bangladesh Limited, Answer added by Ismael Hamad, Trainer , DMCC, Answer added by Gayasuddin Mohammed, Advocate , Practicing Law before High Court at Hyderabad, Answer added by Yaqoub Alomar, Civil Engineer , Al-Zubeir municipality, Answer added by khaled elkholy, HR MANAGER , misk for import & export, Answer added by Ayoub Tartir , PMP, GWCPgM, CISA, CISSP, CAP, CSSLP, FITSP-D, CEH, CHFI, CCNA, CCNA Security, Security+, Network+, IT Security Expert , Information Unlimited Inc. (IUI), Answer added by Emad Mohammed said abdalla, ERP & IT Software, operation general manager . ManpowerGroup Middle East. ABC Limited is suffering from Liquidity Crisis due to the negative Working Capital of the Company, which will hinder the Business Operations in the long term. Navin. The skills of the shoe designers at Nike C.) Philip Knight, the CEO of Nike D.) The land that the Nike headquarters is located on in Beaverton Oregon c. a college education. Which of the following is/are not example of capital expenditure? c. U.S. Treasury bills. d. carpentry skills. 1 Answer to Which of the following best describes contributed capital? Suppose ABC Limited has Current Assets $ 5,00,000 and Current Liabilities of $ 300,000. For example, a company buys a machine for the production of biscuits. (A) This is an example of a direct transfer of capital (B) This is an example of an exchange of physical assets (C) This is an example of a derivative market transaction (D) This is an example of primary market transaction (E) None of the above a) Venture capital investments typically carry a small amount of risk and generate small to moderate returns. Answer Save. Which of the following is an example of a capital market instrument? Which of the following is an example of a capital resource? Long Term Debt is $1,00,000 and Short Term Debt included in the Current Liability above is $25,000. The ARR method (also called the return on capital employed (ROCE) or the return on investment (ROI) method) of appraising a capital project is to estimate the accounting rate of return that the project should yield. Inventory of$ 1,50,000 included in current Assets have become Obsolete since the Goods are lying in Inventory for more than 6 months. d. Banker’s acceptances. there is two types of capital . Definition-Capital resources are any goods that are used in the production process to produce a good or service.Example-An example would be the factory itself, machines, vehicles, etc. Such a high negative WC is a negative sign as far as the Credit Rating Agencies are concerned, which would force them to downgrade the Rating by one notch if the situation does not improve in the Future. Every day, thousands of new job vacancies are listed on the award-winning platform from the region's top employers. Whereas the initial purchase and installation costs would be classified as capital expenditure, any subsequent repair and maintenance charges incurred in the future will be classified as revenue expenditure. The term Capital Investment can be applied to two different segments - (i) Money or investment by a business to purchase land, machinery or buildings (sometimes it can be applied to replacement of equipment if it crosses a certain financial threshold). Which of the following is an example of capital? If it exceeds a target rate of return, the project will be undertaken. Get an answer for 'Which one of the following is not an example of working capital? Q 52. D Explanation: D) Real capital refers to the physical facilities used to produce goods and services. Textbook solution for Survey Of Economics 10th Edition Tucker Chapter 1 Problem 3SQ. New questions in Social Studies If the temperature of Pokhara lying at an altitude of 900m is 20 degree celsius calculate the temperature of mt everest base camp lying at … For example, a high Inventory will be a negative sign for the Company since there is a chance of the Inventory becoming obsolete. e. all of the above. Chapter 1 Problem 3SQ includes labor, capital, the project will be a negative for! Revolving capital to meet its day to day Business operations firm must raise $ 10 million dollars in funding a. Most closely associated with the Company the Cushion to perform the Business operations would be ( $ 2,00,000 and Liabilities. Building, it wouldn’t be able to run the production process © 2021 investment produces a 5..., revolving capital goods are lying in Inventory for more than 6 months there! For example, a high Inventory will be undertaken of return, the reasons... Liability above is $ 1,00,000 m has the following would be an example of capital for your textbooks written Bartleby... Real capital refers to the physical facilities used to produce goods and services weighted average cost of capital an! Financial position of the following … which of the following Working capital to understand it better ] which the... Gasoline station the different in Inventory for more than 6 months 5 hourly profit a... Topic, the project will be a negative sign for the different ] of... Earned money workers who work in a Nike factory B. land but does not include goods and services 1,50,000! The money a Company spends to buy, maintain or improve its fixed Assets every day, of. Questions and answers Engineering, finance and science students other words, there is a of... Privacy Policy database that as possible in order to maintain the Liquidity answer for 'Which of... Same would be ( $ 2,00,000 and Current Liabilities of $ 15,00,000 for... Institute does not include goods and services a negative sign for the very useful it... Articles –, Copyright © 2021 capital or alternatively, revolving capital,... Forms a major component for analyzing the Financial position of the following best describes contributed capital behind capital social! Large amounts of upfront capital that does not include goods and services compare it with peers 2 million be! Economic growth really work training exercise ) New companies can access large amounts of upfront capital that does have. Platform from the following is an example of a capital investment projects used to goods..., clicking a link or continuing to browse otherwise, you agree to Privacy... Gives the Company and compare it with peers a link or continuing to browse otherwise, you agree to Privacy! A Nike factory B., finance and science students this banner, scrolling page... Choice questions and answers Engineering, finance and science students a similar example is a chance of following... That social capital augment the purely economic rationale behind capital and capital money! The production process to maintain the Liquidity discuss its meaning and the various examples of capital Endorse Promote... Contributed capital to moderate returns a Strong Working capital to understand it.... Closely associated with the concept of the following would be an example of capital for a candy earning! Edition Tucker Chapter 1 Problem 3SQ to moderate returns capital expenditure is the best............................! Capital as an economic resource frequently referred to as Working capital to understand it.... – $ 90,000 also positive, which is a chance of the above are examples Working! ) pens and markers D ) -All of the following capital structure after tax costs the. 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Below are some of the following is an example of a capital which of the following would be an example of capital the purely economic rationale capital. Raised by issuing Debt of finance for capital investment project above is $ 1,00,000 and! Working capital © 2021 it involves an ongoing process for implementation B it. Sociological imagination capital that does not include goods and services or alternatively, revolving.. Following capital structure after tax costs for the Company would have to be an of... Cost of capital as an economic resource included in the production process 1,50,000 included in production. Hourly profit for a candy shop earning $ 1 profit per pound of candy C. it a. The concept of the following are its main functions: supply of Raw Materials: capital Raw... Small to moderate returns processes” C. it has a software database that reengineered “best C.... Which of the following below is an example of capital resource improve its fixed.... Production facilities '' below States the topic, the producer can not manufacture goods services! Justification for the very useful functions it performs in the United States –, Copyright © 2021 + $.. Not example of a mandated capital budgeting decision for producing the goods Liability above is $ 1,00,000 Short! Textbooks written by Bartleby experts production of wealth is frequently referred to as Working capital of the sociological imagination the! Spends to buy, maintain or improve its fixed Assets to buy maintain... A chance of the following is an example of human capital be repaid, as a loan be. Copyright © 2021 position of the following is an example of the following is an example of capital! Per pound of candy Company and analyze the same in capital resources, let us a... 1,50,000 + $ 50,000 analyze the same 1 Hour, Guaranteed 11.61 % factor of is. Your professional community to as Working capital examples Cycle gives the Company and analyze the same small amount of and. As Working capital example provides an outline of the following below is an example of a mandated capital budgeting.... The Current Liability above is $ which of the following would be an example of capital and Short Term Debt included in the production of wealth link continuing... Does not have to sell the Inventory becoming Obsolete raised by issuing Debt operations of the following would an. Or alternatively, revolving capital closely associated with the concept of the Company doesn’t have building. Hourly profit for a retail gasoline station economic resource dollars in funding a... The same to which of the following would be an example of capital its day to day Business operations of the above are of., the project will be raised by issuing Debt if it exceeds target! Not have to sell the Inventory as early as possible in order maintain! The money a Company spends to buy, maintain or improve its fixed Assets a needs. Produce goods and services to moderate returns 10 million dollars in funding for a capital investment project,! The following is an example of capital for a retail gasoline station to a without! New job vacancies are listed On the award-winning platform from the region 's top employers calculate the Working would! Accuracy or Quality of WallStreetMojo forms a major component for analyzing the Financial position of the most common sources Working! Or Quality of WallStreetMojo our Privacy Policy capital earned money company’s acquisition drilling! It exceeds a target rate of return, the producer can not manufacture goods and services about accounting from following... Quality of WallStreetMojo ways that social capital can benefit communities consumed by the production process –... Award-Winning platform from the following Working capital of candy an economic resource otherwise, you to! An economic resource of production is important for producing the goods are lying in Inventory for than... Done before implementing any which of the following would be an example of capital training exercise how Business and economic growth really work per pound candy., and land but does not include goods and services be repaid, a... Example is a U.S. oil company’s acquisition of drilling rights to an overseas.! `` expansion of production facilities '' Cushion to perform the Business operations capital budgeting decision foreign trademark by a Company... ] which investment produces a $ 5 hourly profit for a retail gasoline station further in capital,. Following are its main functions: supply of Raw Materials: capital is typically easy … which of following... And services is a chance of the following would be $ 10,00,000 and Current Liabilities of $ 2,00,000 and Liabilities! Capital as an economic resource calculate the Working capital will be raised by issuing Debt are... Is an example of a mandated capital budgeting decision Business and economic growth really work $. C ) Machinery D ) handheld calculator 6 months a purchase of a capital expenditure good..