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Question
Differentiate between owned funds and borrowed funds.
Distinguish Between
Solution
| Owned funds | Borrowed funds | |
| 1. | Owned funds refer to funds provided by the owners. | Borrowed funds refer to the funds raised through debentures and loans from banks, financial institutions, and public deposits. |
| 2. | Such funds provide 'risk capital' and remain permanently invested in the business. | Such funds are raised for specified periods at a fixed rate of interest. |
| 3. | Owners have the right to control how their businesses are managed. | Creditors who supply these funds have no authority over the business's administration. |
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Sources of Raising Capital
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