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Resource Mobilization — Entrepreneurship STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEntrepreneurshipResource Mobilization3 Marks
Question
What are the features of borrowed capital?
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Answer

Borrowed capital is the capital borrowed by the enterprise for the normal running of the enterprise. Its features are:
  1. Interest: The borrowed capital has to be repaid with interest.
  2. Time period: The borrowed capital is to be paid back in the agreed time limit. Thus, it is the obligation of the entrepreneur.
  3. Right of control: The lenders of borrowed capital normally have no control over the management of the enterprise. However, some conditions are to be fulfilled by the entrepreneur.

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