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प्रश्न
Dhaval Acharya, after acquiring a bachelor’s degree in Hotel Management joined his father’s chain of vegetarian restaurants in Ahmednagar. Being young and enterprising, he suggested his father to add a new section of vegetarian bakery items which required an investment of ₹ 5 crores. His father Mr. Aariketh Acharya suggested him to take the decision with caution and understood everything comprehensively as bad decision may damage the financial fortune of business.
Identify the decision suggested by Mr. Aariketh Acharya. State by giving any three reasons as to why he must have advised his son to take decision with caution.
उत्तर
Mr Aariketh Acharya has suggested capital budgeting decision.
Reasons why he must have advised this decision are:
- These decisions have bearing on the long-term growth. They affect the future prospects of the business.
- These decisions result in large portion of funds being blocked in long term projects, these investments are planned after a detailed analysis.
- These decisions affect the returns of the firm, therefore influence the overall business risk complexion of the firm.
- These decisions once taken, are not reversible without incurring heavy losses. Abandoning a project after heavy investment is costly in terms of waste of funds.
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संबंधित प्रश्न
Explain the following as factors affecting the requirements of fixed capital:
Financing alternatives
Explain the following as factors affecting the requirements of working capital:
Seasonal factors
State, with reason, whether the following statement is True or False.
Requirement of working capital does not depend upon any factor.
What is working capital? Discuss five important determinants of working capital requirement?
Write a word or a term or a phrase which can substitute the following statement :
The difference between current assets and current liabilities.
Fixed Capital Working Capital
Answer the question.
Briefly explain any four types of working capital required by a business concern.
Explain any four factors that affect the capital structure of a company.
Companies with a higher growth potential are likely to
Higher working capital usually results in :
Current assets are those assets which get converted into cash
Higher dividend per share is associated with
Current assets of a business firm should be financed through
Which of the following factors highlight the importance of capital budgeting decisions
Net working capital may be defined as the:
Assertion (A): A commercial bill is a bill of exchange used to finance the working capital requirements of business firms.
Reason (R): Commercial bill is a short-term, negotiable, self-liquidating instrument which is used to finance the credit sales of firms.
Fixed capital is financed through:
