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Question
Explain the following as factors affecting the requirements of working capital:
Scale of operations
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Solution
Working capital refers to current assets which help in day-to-day business operations.
The scale of operations: A company which is operating in a large-scale of 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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Match the pairs
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Group B |
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b, Overdraft facility |
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Option ‘A’: Rate of interest 9%
Option ‘B’: Rate of interest 13%
Which source of debt, ‘Option A’ or ‘Option B’, is better? Give reasons in support of your answer. Also, state the concept being used in taking the decision.
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Name the method through which the company decided to raise additional capital.
State, with reason, whether the following statement is True or False.
Requirement of working capital does not depend upon any factor.
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Fixed Capital Working Capital
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______ involve identifying various sources of funds and deciding the best combination for raising the funds.
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