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Question
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
RELATED QUESTIONS
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 |
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d. Debentures |
4. Current Account |
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e. Return on shares |
5. Application Money |
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6. Dividend |
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7. Investment in current assets |
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8. Borrowed capital |
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9. Savings Account |
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10. Registered Document |
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Financing alternatives
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
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Name the method through which the company decided to raise additional capital.
Answer the question.
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Higher working capital usually results in :
Current assets are those assets which get converted into cash
Higher dividend per share is associated with
Current assets of a business firm should be financed through
______ of a firm refers to those assets which can be converted into cash or cash equivalents in a short period of time.
______ refers to the decisions regarding where to invest so as to earn the highest possible returns on investment.
Net working capital may be defined as the:
Fixed capital is financed through:
