Advertisements
Advertisements
Question
When XYZ company acquired a toy manufacturing company, it paid a large amount for the goodwill. Which source of business funds of XYZ company was impacted?
Options
Fixed capital
Special working capital
Circulating capital
Gross working capital
Advertisements
Solution
Fixed capital
Explanation:
Fixed capital refers to the finances required to acquire fixed assets that will be used continuously for business activities.
APPEARS IN
RELATED QUESTIONS
Explain the following as factors affecting the requirements of working capital:
Seasonal factors
Write a word or a term or a phrase which can substitute the following statement :
The difference between current assets and current liabilities.
What is meant by capital gearing ratio?
Current assets are those assets which get converted into cash
Higher dividend per share is associated with
Which of the following factors highlight the importance of capital budgeting decisions
______ involve identifying various sources of funds and deciding the best combination for raising the funds.
______ decision involves the decision regarding the distribution of profit or surplus of the company.
Dhaval Acharya, after acquiring a bachelor’s degree in Hotel Management joined his father’s chain of vegetarian restaurants in Ahmednagar. Being young and enterprising, he suggested his father to add a new section of vegetarian bakery items which required an investment of ₹ 5 crores. His father Mr. Aariketh Acharya suggested him to take the decision with caution and understood everything comprehensively as bad decision may damage the financial fortune of business.
Identify the decision suggested by Mr. Aariketh Acharya. State by giving any three reasons as to why he must have advised his son to take decision with caution.
