What is the difference between internal and external sources of raising funds? Explain.
Answers
Answer:
The difference between internal and external sources of raising funds are :
Internal sources of funds can satisfy only few requirements of the business enterprise while external sources of funds are used for fulfillment of large-scale requirements.
Internal funds may be economical . External funds may be costly.
E.g of internal sources of capital are equity share capital and retained earnings and external sources of capital are financial institution, loan from banks, trade credit, public deposit, debenture, preference shares etc .
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