Question

Tapan, after leaving his job, wanted to start a Private Limited Company with his son. His son was keen that the company may start manufacturing of Mobile-phones with some unique features. However, Tapan felt that the mobile phones are prone to quick obsolescence and a heavy fixed capital investment would be required regularly in this business. Therefore, he convinced his son to start a furniture business. ______ factor affecting fixed capital  requirements is making Tapan choose furniture business over mobile phone. 

पर्याय

• Scale of operations

• Choice of techniques

• Financing alternatives

• Technology upgradation

Answer 1

Technology upgradation

Explanation - 

Industries with rapid technological advancements require more fixed capital because old machines become obsolete as new technology is developed, necessitating the purchase of new plants and machinery, whereas companies with slower technological advancements require less fixed capital because they can manage with older machines.