CUET Preparation Today
The working capital requirement of a business is NOT likely to be low when: |
The scale of the business operation is small When the growth prospects of the business are high When the raw material is easily available When the rate of inflation is low |
When the growth prospects of the business are high |
The correct answer is option 2- When the growth prospects of the business are high. The working capital requirement of a business is NOT likely to be low, When the growth prospects of the business are high. High growth prospects lead to increased inventory and receivables as the business expands, which in turn raises the working capital requirement. Thus, there will be high capital requirement when the growth prospects are high. |
