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Question
Options
fixed
working
borrowed
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Solution
The fixed capital remains in business almost permanently.
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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 |
|
7. Investment in current assets |
|
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8. Borrowed capital |
|
|
9. Savings Account |
|
|
10. Registered Document |
Explain briefly any four factors that affect the working capital requirement of a company.
Explain the following as factors affecting the requirements of fixed capital:
Technology upgradation
Varunica Ltd., a reputed truck manufacturing company, needs rupees twenty crores as additional capital to expand its business. Mr. Alind Jindal, the CEO of the company, wants to raise funds through equity. The Finance Manager, Mr. Nikhil Sachdeva, suggests that the existing shareholders be offered the privilege to subscribe to new issue of shares as per the terms and conditions of the company which was agreed by Mr. Alind Jindal.
Name the method through which the company decided to raise additional capital.
How does working capital affect both the liquidity as well as profitability of a business?
Fixed Capital Working Capital
Answer the question.
Briefly explain any four types of working capital required by a business concern.
What is meant by capital gearing ratio?
Explain any four factors that affect the capital structure of a company.
Companies with a higher growth potential are likely to
A fixed asset should be financed through
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.
Working capital is calculated as?
______ refers to the decisions regarding where to invest so as to earn the highest possible returns on investment.
Read the following text and answer the following question on the basis of the same:
Mr. A. Bose is running a successful business. Mr. Bose is the owner of R. K. Cement Ltd. Mr. Bose decided to expand his business by acquiring a Steel Factory. This required an investment of Rs. 60 crores. To seek advice in this matter, he called his financial advisor Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%). Employ more of cheaper debt may enhance the EPS. Mr. Ghosh also suggested him to take loan from a financial institution as the cost of raising funds from financial institutions is low. Though this will increase the financial risk but will also raise the return to equity shareholders. He also apprised him that issue of debt will not dilute the control of equity shareholders. At the same time, the interest on loan is a tax-deductible expense for computation of tax liability. After due deliberations with Mr. Ghosh, Mr. Bose decided to raise funds from a financial institution.
"Mr. T. Ghosh who advised him about the judicious mix of equity (40%) and Debt (60%)." The proportion of debt in the overall capital is called ______.
A business firm should have extra funds to meet future emergencies. Identify the type of working capital indicated here.
