Question

Distinguish between Internal and External Expansion.

Answer 1

Internal Expansion	External expansion
(i) It is the gradual increase in the activities of the concern.	(i) It is a business combination where two or more firms combine and expand their business activities.
(ii) Firm may expand its present production capacity by adding more machines or by replacing old machines with the new machinew	(ii) Here two or more units engage in similar business or related process or stages.
(iii) it results in the increase in business activities and broadening the present capital structure.	(iii) After combination the constituted firm pursues some common objectives or goals.