CBSE (Commerce) Class 12CBSE
Share
Notifications

View all notifications

Explain the Following as Factor Affecting 'Financing Decision'. Level of Fixed Operating Cost - CBSE (Commerce) Class 12 - Business Studies

Login
Create free account


      Forgot password?

Question

Explain the following as factor affecting 'financing decision'.

Level of fixed operating cost

Solution

Level of fixed operating cost: Fixed operating cost includes salaries, rent, insurance payouts etc. If a firm has low fixed operational cost, it can opt for the debt which involves fixed financing cost in the form of interest obligations, thereby increasing fixed cost.

  Is there an error in this question or solution?

APPEARS IN

Solution Explain the Following as Factor Affecting 'Financing Decision'. Level of Fixed Operating Cost Concept: Financial Decisions - Financing and Dividend.
S
View in app×