Difference between the owner fund and borrowed fund

1.	Difference between the owner fund and borrowed fund
Answer» \tOwner capital : 1. Meaning :\xa0Consist of the amount contributed by owners and their profit reinvested in business. 2. Permanent :\xa0It remains permanent invested. 3. Risk :\xa0It carries risk of business. 4. Control :Control rests with providers of owners capital. 5. Security :\xa0It does not require any asset as security. 6. reward :\xa0Reward is dividend. 7. Priority :\xa0Reward is paid after payment of interest on borrowed funds. 8. Nature of return :\xa0The rate of dividend may fluctuate year to year.Borrowed capital :1. Meaning :\xa0It includes funds available in the form of loans or credit 2. Permanent :\xa0It is not permanent source of investment. 3. Risk :\xa0The debts of company are secured. 4. Control :\xa0No control rests with providers of borrowed funds. 5. Security :\xa0It is backed by security of assets. 6. reward :\xa0Reward is interest. 7. Priority :\xa0Payment of interest gets priority over payment of dividend. 8. Nature of return :\xa0The rate of interest is fixed on funds.\t\xa0

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