ABSTRACT
Retained profits are the major source of finance for businesses. One reason for this is that organizations do not have to pay interest or dividends to use retained profits. But, like money you put into a building society to earn interest, if you use it to buy something, you lose interest. Organizations ought to use money in the most effective way, so if they could earn more money investing in a bank deposit or building society account than in a new project, they should not use funds on that project.
