Final answer:
Startup capital is typically used for operating expenses of a new business, covering initial costs before the business generates revenue. It is mostly associated with option A of the provided choices.
Step-by-step explanation:
Startup capital is the money used to start a business, covering a variety of initial costs. This capital is used for getting the business off the ground and may include operating expenses for the first year, among other things. So, taking into consideration the options provided:
- A. Operating expenses for the first year of a new business are indeed what startup capital is often used for, as it includes costs such as rent, supplies, and salaries before the business starts generating its own revenue.
- B. Offering competitive wages for high-tech workers could also potentially be funded by startup capital, especially if hiring skilled employees is critical from the start.
- C. Startup capital can also fund research and development (R&D) to refine a business idea or prototype, a crucial step for many startups, especially technology-focused companies.
- D. While startup capital might sometimes go towards expanding production and advertising budgets, this is more commonly associated with growth financing once the business has been established.
Given these considerations, the most fitting option that startup capital pays for is A. Operating expenses for the first year of a new business.