Question

Formulate a capital plan for a hypothetical business organisation

Answer 1

The process for formulating a capital plan its is necessary to

Identify the source of income

Determine the fixed costs involved

Establish the variable expenditure

Create a budget

Explanation:

• The first step is to identify the source of income in regards to selling of the goods, invested income, loans taken from the bank and other forms of savings
• The next stage is to determine the fixed costs involved which include the rent of the place, salaries to be paid, taxes, external payments to the government, accounting  and other forms of legal services involved in the process
• The variable expenses include the costs involved in marketing the product, advertising, purchasing the raw materials, transportation and storage and  many other forms of expenses. Thereafter create a budget for the various expenditures with buying the furniture, computers and other fixed items

To know more about formulating a capital plan

Financial planning include:

(a). Estimate about value of capital

(b). Formulation of policies segment capital

(c). Determination of capital structure

(d). All above

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