Finance Numericals

  Revenue Expenditure: It is a short term expenditure incurred to meet operating expenses or daily short term business expenses to maintain profit of a company. The benefit of this expenditure is current year only or one year only.  Capital Expenditure: It is a long term expenditure incurred on to purchase assets which increases the assets of a company. It benefited to company more than one year. Let’s find out the difference between revenue expenditure and capital expenditure: S.No. Point of difference Revenue Expenditure Capital Expenditure 1. What is the purpose of capital expenditure and revenue expenditure? Revenue expenditure helps to maintain the profit capability of a company. Capital expenditure helps to maintain the earning ability of a company. 2. How revenue and capital expenditures are used? Revenue expenditure is used to purchase resale goods and

   Foreign Direct Investment (FDI): It is an investment made by investors or company in a foreign country. An investors or company should own 10% ownership in a foreign country companies. So, that the investment is known as foreign direct investment. Types of Foreign Direct Investment: There are three types of foreign direct investment: Horizontal foreign direct investment Vertical foreign direct investment Conglomerate foreign direct investment Horizontal Foreign direct investment:  In this type of foreign direct investment the company expand its home country business in different countries. It means investor home country business is also open in different country. It will increase the market and also the profit of the company. Vertical Foreign Direct investment:  In this type of investment the company establish its business in foreign country where the production cost is less. In this investment the business activities of foreign company is same with