English

Explain the Following as Factor Affecting the Requirements of Fixed Capital: Growth Prospects - Business Studies

Advertisements
Advertisements

Question

Explain the following as factor affecting the requirements of fixed capital:

Growth prospects

Solution

Factors affecting the requirements of fixed capital:

Growth prospects: The company is growing and expanding, so it requires a higher amount of fixed capital.

shaalaa.com
Factors Affecting Fixed and Working Capital Requirements
  Is there an error in this question or solution?
2013-2014 (March) Delhi Set 2

RELATED QUESTIONS

Big retail stores requires large amount of ............................. capital.

  1. Fixed
  2. Working
  3. Loan

Identify the factor affecting fixed capital requirements of Fashion-ate Pvt. Ltd.

Radhika and Vani who are young fashion designers left their job with a famous fashion designer chain to set-up a company 'Fashionate Pvt. Ltd.' They decided to run a boutique during the day and coaching classes for entrance examination of National Institute of Fashion Designing in the evening. For the coaching centre they hired the first floor of a nearby building. Their major expense was money spent on photocopying of notes for their students. They thought of buying a photocopier knowing fully that their scale of operations was not sufficient to make full use of the photocopier. In the basement of the building of 'Fashionate Pvt. Ltd.' Praveen and Ramesh were carrying on a printing and stationery business in the name on 'Neo Prints Pvt. Ltd.' Radhika approached Praveen with the proposal to buy a photocopier jointly which could be used by both of them without making separate investment. Praveen agreed to this. Identify the factor affecting fixed capital requirements of 'Fashionate Pvt. Ltd.'


Rizul Bhattacharya 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. Rizul Bhattacharya felt that the mobile phones are prone to quick obsolescence and a heavy fixed capital investment would be reuired regularly in this business. Therefore he convinced his son to start a furniture business.

Identify the factor affecting fixed capital requirements which made Rizul Bhattacharya to choose furniture business over mobile phones.


'Indian Logistics' has its own warehousing arrangements at key locations across the country. Its warehousing services help business firms to reduce their overheads, increase efficiency and cut down distribution time.

A state with reason, whether the working capital requirements of 'Indian Logistics' will be high or low.


‘Reliable Transport Services Ltd.’ specialises in transporting fruits and vegetables. It has a good reputation in the market as it delivers the fruits and vegetables at the right time and at the right place.
A state with reason whether the working capital requirements of ‘Reliable Transport Services’ will be high or low.


How does 'Inflation' affect the working capital requirements of a company? State.


Explain the following as factor affecting the requirements of fixed capital:

Natural of business


Explain the following as factor affecting the requirements of fixed capital:

Level of collaboration


Explain the following as factor affecting the requirement of working capital:

Business cycle


Explain the following as factor affecting the requirements of working capital:

Operating efficiency


Explain the following as factor affecting the requirements of working capital:

Availability of raw material


Explain the following as a factor affecting the requirement of working capital: 

Level of competition


What is Working Capital? Factors affecting requirement of Working capital?


Discuss in brief any four factors that affect the working capital requirement of a company.


Bright Bulbs Pvt. Ltd., is manufacturing good quality LED bulbs and catering to the local market. The current production of the company is 1,000 bulbs a day. Anita, the marketing manager of the company, surveyed the market and decided to supply the bulbs to five-star-hotels also. She anticipated the higher demand in future and decided to buy a sophisticated machine to further improve the quality and quantity of the bulbs produced. Which factor affected the fixed capital requirements of the company?


Ratan Ltd. needs to raise funds from the financial market and, hence, considers issuing equity shares. State any four reasons to explain why this source of raising funds is considered by the company.


Share
Notifications

Englishहिंदीमराठी


      Forgot password?
Use app×