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प्रश्न
Explain the following as factor affecting the requirements of fixed capital:
Scale of operations
उत्तर
The scale of operations: A company with large-scale operations will require larger fixed assets in the form of plants, land and building.
Larger organisation ⇒ Higher investment in fixed assets
Small organisation ⇒ Lower investment in fixed assets
संबंधित प्रश्न
Answer the following question:
The Return on Investment (ROI) of a company ranges between 10 - 12% for the past three years. To finance its future fixed capital needs, it has the following options for borrowing debt:
Option ‘A’: Rate of interest 9%
Option ‘B’: Rate of interest 13%
Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your answer. Also, state the concept being used in taking the decision.
Explain briefly any four factors that affect the working capital requirement of a company.
Explain the following as factors affecting the requirements of working capital:
Production cycle
Amrit is running a ‘transport service’ and earning good returns by providing this service to industries. Giving reason, state whether the working capital requirement of the firm will be ‘less’ or ‘more’.
Ramnath is into the business of assembling and selling of televisions. Recently he has adopted a new policy of purchasing the components on three months credit and selling the complete product in cash. Will it affect the requirement of working capital? Give reason in support of your answer.
How does working capital affect both the liquidity as well as profitability of a business?
What is working capital? Discuss five important determinants of working capital requirement?
Fixed Capital Working Capital
What is meant by capital gearing ratio?
Explain any four factors that affect the capital structure of a company.
Higher working capital usually results in :
Higher dividend per share is associated with
______ involve identifying various sources of funds and deciding the best combination for raising the funds.
Net working capital may be defined as the:
A business firm should have extra funds to meet future emergencies. Identify the type of working capital indicated here.
