5 Importance of Capital are listed and explained in this article. We do hope you find it informative and helpful for your research.

Importance of Capital

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5 Importance of Capital:

1. Capital helps to boost production 

Then adequate capital is made available to any business outfit, and mass production of goods and services becomes inevitable. Capital is the oil that is needed for the swift production of goods and services.

2. Capital boosts efficiency

Thanks to technology which has drastically made work easier and faster, when capital is therefore made available to all businesses, the businesses will be able to buy or employ the service of machinery which will in turn increase efficiency in the production rate of every company.

Read Also: Advantages of Division of Labour

3. It assists in the location of industry

Capital helps businesses to be located just in the right place where they should be. It is the inadequacy of capital that makes business owners shy away from some locations and establish themselves in a place where they ought not to be in the first place.

4. Production of quality goods

Adequate capital helps the producers to be able to produce goods and services that are of high quality and standards.

5. Increase the standard of living

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When a company is doing well as a result of adequate capital, the laborers in the company gets paid very well and it, in turn, increases the worth of individuals in that company.