Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Management

Question:

Choose the pair of factors which does not affect requirement of Fixed Capital.

Options:

Growth prospects and diversification

Scale of operational and seasonal factors

Nature of business and choice of technique

Technological upgradation and Diversification

Correct Answer:

Scale of operational and seasonal factors

Explanation:

The correct answer is option (2) : Scale of operational and seasonal factors

The pair of factors which does not affect the requirement of Fixed Capital is option 2: Scale of operations and seasonal factors.

The requirement of Fixed Capital is affected by various factors such as the nature of business, choice of technique, growth prospects, diversification, technological upgradation, financing alternatives, level of collaboration, etc.

However, the scale of operations and seasonal factors affect the requirement of Working Capital,which is the capital required for day-to-day operations of the business.

Therefore, option 2 is the correct answer: