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| 1. |
Why retained earning is called self financing |
| Answer» Firms usually keep a certain part of the profits earned before distributing dividends to their shareholders. These undistributed profits are retained in the business for future use and are known as retained earnings.\xa0Retained earnings\xa0are called self financing as\xa0a part of these funds are\xa0reinvested in the business.\xa0<br>Because a portion of companies net profit after tax and dividend which is not distributed but are retained for investment purpose that is why retained earning is also known as self financing.?? | |