Question

Which are the most likely uses of capital invested in a business? Check all that apply.

paying taxes
hiring workers
repaying investors
producing goods
distributing goods
buying materials

Answer 1

Check:
- hiring workers
- producing goods
- distributing goods
- buying materials

Brief note: Capital is primarily used to fund productive operations (payroll, materials, production and distribution). Paying taxes and repaying investors are cash outflows but not the primary productive uses of newly invested capital (repaying investors is a return of capital).