Read the following Case Study and answer, question

Aryan is a CEO of RS Infotech Ltd., which is a company working in the technology sector for the last 55 years. The company is doing very well in this sector and now has a growth plan of entering into cosmetics market.

Keeping in view the changing tastes and preferences Of customers, it is planning to enter organic products market.

The company targets to achieve 20% of market share in the first 2 years of its entry.

For financial issues, Aryan consulted his chief finance officer, Raj and found that it requires 50 crores of additional capital for setting up a separate cosmetics division.

The Company plans to arrange this money by issuing equity shares in the market but it lacks sufficient cash to bear the floatation cost and hence planned to approach the financial market for the same.

State the type of fixed capital requirement by RS Infotech.

High

The correct answer is option (4) : High

The type of fixed capital requirement by RS Infotech, as described in the case, is:

(4) High.

The company is planning to enter into the cosmetics market and is aiming to achieve 20% of the market share within the first two years.
For this purpose, it needs 50 crores of additional capital. This substantial capital requirement indicates that the company's fixed capital requirement is high. This capital will be utilized for setting up a separate cosmetics division, which typically involves significant fixed costs related to infrastructure, equipment, and other long-term assets.