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Explain the Following as Factor Affecting the Requirements of Fixed Capital: Scale of Operations - Business Studies

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

Scale of operations

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Solution

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

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