Practicing Success
Which of the following statements is NOT true with regard to use of fixed capital? |
It affects the long term growth of the business. Large amount of funds are involved. The business risk involved is low. The investment decisions are irreversible. |
The business risk involved is low. |
Risk involved: Fixed capital involves investment of huge amounts. It affects the returns of the firm as a whole in the long term. Therefore, investment decisions involving fixed capital influence the overall business risk complexion of the firm. |