Question

why is investment deducted for calculating effective capital?

​

Answer 1

Effective capital is that part of total capital which is solely invested in your business. To put in other way it is net of investments made outside the business of the entity. hence investments outside the business must be deducted.

$\mathbb\green{PLZ MARK ME BRAINLIEST}$

$\huge\fcolorbox{red}{yellow}{answer by itz devil99}$

$\mathcal\pink{HOPE IT HELPS YOU}$