Rajiv has a textile firm. For carrying out production, Rajiv spent money on procuring thread from traders, buying machines and equipment and built a warehouse to store the cloth produced. The expenditure incurred by Rajiv for conducting the production process is termed as:

A
Investments
B
Profits
C
Equity
D
Interest

Solution:

The expenditure incurred by Rajiv for conducting the production process is termed an investment. The money spent on goods for future utility, not immediate consumption, can be called an investment. Here, Rahul is spending money on procuring thread from traders, buying machines and equipment, and building a warehouse to store the cloth he has produced. His utility from machines, equipment, and warehouse are not getting over just after consumption. He will be using it continuously, which is an investment for his business. Profits are the revenue obtained over and above the costs incurred in the industry. Equity refers to the shares held by the person, and interest is received on the money deposited in banks or on equity.

Rajiv has a textile firm. For carrying out production, Rajiv spent money on procuring thread from traders, buying machines and equipment and built a warehouse to store the cloth produced. The expenditure incurred by Rajiv for conducting the production process is termed as:

Solution:

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