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Question
Initial planning of capital requirement is made by______.
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Solution
Initial planning of capital requirement is made by company's promoters.
Explanation:
Initial planning of fixed capital requirement is made by company's promoters. For this, they first prepare a list of fixed assets needed by the company and the cost of these assets is estimated. They collect information regarding the price of land, the cost of construction of the building, the cost of plant and machinery, etc.
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RELATED QUESTIONS
Match the correct pairs:
| Group 'A' | Group 'B' | ||
| (1) | Working capital | (a) | Redeemed capital |
| (2) | Equity share capital | (b) | Secretary |
| (3) | Share warrant | (c) | Shares do not have distinctive numbers |
| (4) | Recommendation of dividend | (d) | Fixed assets |
| (5) | Fungibility | (e) | The link between SEBI and Depository |
| (f) | Board of Directors | ||
| (g) | Registered document | ||
| (h) | Sum of current assets | ||
| (i) | Bearer document | ||
| (j) | Permanent capital |
Select the correct answer from the options given below and rewrite the statement.
______ refers to any kind of fixed asset.
Fixed capital is also referred as circulating capital.
State whether the following statement is true or false.
The business will require huge funds if assets are acquired on a lease basis.
State whether the following statement is true or false.
A firm with large scale operations will require more working capital.
Answer in one sentence.
What is fixed capital?
State any four factors affecting fixed capital requirement.
Justify the following statement.
Fixed capital stays in the business almost permanently.
Justify the following statement.
There are various factors affecting the requirement of working capital.
Fixed capital is also referred as circulating capital.
______ capital is used to carry out day-to-day business activities.
Distinguish between the following.
Fixed Capital and Working Capital.
Liberal credit policy creats a problem of bad debts.
Distinguish between the following.
Fixed Capital and Working Capital
Liberal credit policy creates a problem of bad debts.
Explain the following term/concept:
Fixed capital
Liberal credit policy creates a problem of bad debts.
Distinguish between the following.
Fixed Capital and Working Capital.
