Question

Internal sources of capital are those that are

(a) generated through outsiders such as suppliers

(b) generated through loans from commercial papers

(c) generated through issue of shares

(d) generated within the business

Answer 1

Internal sources of capital are those that are generated within a business—for instance, by selling surplus inventories, collecting bill receivables and reinvesting profits. Funds thus obtained are said to have been generated through internal sources of capital.

Hence, the correct answer is option (d).