A business sells a factory it owns to raise funds to expand its product range. Which term best describes this action?

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Question

A business sells a factory it owns to raise funds to expand its product range. Which term best describes this action?

Accepted Answer

Sale of a non-current asset — Selling a factory, which is a fixed or non-current asset, to raise funds is described as the sale of a non-current asset. Sale and leaseback is a specific arrangement where the asset is sold and then rented back, which is not described here. Retaining profit and increasing working capital are entirely different concepts.

Answer

Sale and leaseback arrangement

Answer

Sale of a non-current asset

Answer

Retaining profit for reinvestment

Answer

Increasing working capital

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