Suggest in which of the following cases, the fixed capital requirement of company will be more?
(A) A firm buying from small retailers and selling it into the market
(B) Leasing a factory premises instead of buying it
(C) A textile company is diversifying into a cement manufacturing
(D) A Micro Service Enterprise
(E) A company manufacturing two wheelers and four wheelers
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (C), and (E) Only.
(C) A textile company diversifying into cement manufacturing will require more fixed capital because cement manufacturing involves heavy machinery, large-scale production facilities, and significant infrastructure investments.
(E) A company manufacturing both two-wheelers and four-wheelers will also require more fixed capital due to the need for large-scale production facilities, equipment, and infrastructure for the manufacture of both types of vehicles.
Other options involve businesses that may require less fixed capital.