In basic terms,a business must earn a return on capital that exceeds the cost of capital.

Name: In basic terms,a business must earn a return on capital that exceeds the cost of capital.
Brand: Quizplus
Rating: 4.7 (26 reviews)

Question

Quizplus · Accepted Answer

This is the basic principle of finance and is commonly known as the "cost of capital theory". It means that a business must generate more revenue than what it costs to finance its operations and investments in order to be profitable and sustainable in the long term.

In Basic Terms,a Business Must Earn a Return on Capital