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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.
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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
Match the pairs
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Group A |
Group B |
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a. Fixed Capital |
1. Owned Capital |
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b, Overdraft facility |
2. Bearer document |
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c. Share certificate |
3. Investment in fixed assets |
|
d. Debentures |
4. Current Account |
|
e. Return on shares |
5. Application Money |
|
|
6. Dividend |
|
7. Investment in current assets |
|
|
8. Borrowed capital |
|
|
9. Savings Account |
|
|
10. Registered Document |
Explain the following as factors affecting the requirements of working capital:
Nature of business
Explain the following as factors affecting the requirements of working capital:
Production cycle
State, with reason, whether the following statement is True or False.
Requirement of working capital does not depend upon any factor.
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.
What is working capital?
What is meant by capital gearing ratio?
Higher dividend per share is associated with
______ decision involves the decision regarding the distribution of profit or surplus of the company.
Which group consists of fixed assets?
What is fixed capital?
Which list contains long-term sources for financing fixed capital?
Which set of activities is covered by expenditure on fixed capital?
How does the Nature of Business affect fixed capital requirement?
What is the effect of a larger Scale of Operations on fixed capital?
How does fast obsolescence under Technology Upgradation affect fixed capital requirement?
