A company may issue this type of shares on the condition that the company will repay the amount of share capital to the holders of this category after a fixed period, or even earlier at the discretion of the company.

A lease is a contractual agreement whereby one party, i.e. the owner of the asset, grants the other party the right to use the asset in return for a periodic payment.

Debentures, as interest paid on them is tax deductible, which would benefit the organization as compared to preference and equity shares.

Factoring appeared in the Indian financial scene only in the early nineties as a result of RBI initiatives.

State Industrial Development Corporation and Unit Trust of India are examples of non-banking financial companies (NBFCs).

Trade Credit. It is the credit extended by one trader to another for the purchase of goods and services. Trade Credit is a convenient and continuous source of fund. The volume and period of credit depend on the reputation of the purchasing firm, the position of the seller and volume of purchase.

True. Loans from commercial banks is a flexible source of finance, as the loan amount can be increased according to business needs and can be repaid in advance when funds are not needed.

True. Retained earnings enhance the capacity of the business to absorb unexpected losses.

Retained earnings are the cumulative earnings of the company after dividends.

The analogy of circulation of blood was used to explain how working capital flows and circulates in the business.