0
If you mean additional capital investment,
YES
in terms of amount
BUT NOT necessarily
in terms of percentage.
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∙ 13y ago
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How increase number of investors can increase profit?
Increasing the number of investors will increase your capital. The more capital you have the more money you can use for your business. The more money is used for your business operations the more goods/services will be provided, thus increasing your turnover and profit.
of these is not considered a capital investment?
Profit
Who of these is not considered a capital investment?
Profit
What is money for investment?
Using money or capital to buy an asset with the hope that the value of that asset will increase and give you the opportunity to sell at a profit.
Why is profit maximization not an appropriate goal of the firm?
A firm cannot survive with mere profit maximization, but must increase long-term security through investment and meeting shareholder expectations. This will increase their productive capacity for the furture as well as encourage the risky capital investment of the shareholders.
Why investment increases?
increase in investment will expand the productive capacity of the economy
Do you use capital if you own a company that makes a profit and you spend the extra money to entertain customers?
Yes, you are using capital because you are using money. In this case, you can consider it a business investment.
Does profit add to capital?
Profit is earned by the business in fiscal year and it is part of capital of the owner that's why it increases the capital of business because owners invest money to earn profit so it is shown in capital portion of balance sheet as an addition to capital.
Can a company increase its share capital with its own profit?
No
How is the concept of a normal return on investment related to the distinction between business and economic profit?
Economic profit is the profit made on an investment of some sort in which inflation and other economic factors have been considered. Normal return on investment is just the net profit made in the investment (simple subtraction).
How reserves are part of capital?
Reserves are maintained from profit of current year business and profit is part of capital that's why reserves are also part of capital as if it is not maintained separately it will be included in profit or capital.
Can you add profit from sales in capital?
Profit or loss from sales is part of capital of business and that's why it is shown in balance sheet as an addition or deduction from the capital of business to show the net effect of operations.
