Factors Affecting Fixed and Working Capital

Q.

Financial management is based on three broad financial decisions. What are these?

Q.

Every manager has to take three major decisions while performing the finance functions. Explain them.

Q.

What is meant by 'long-term investment decision'? State any three factors which affect the long-term investment decision.

Q.

What is included in shareholder’s funds?

Q.

Write 4 differences between Fixed capital and Working capital

Q.

Short term investment decisions affect the___

1. Large amount of funds for future

2. Long term profitability

3. Purchase of fixed assets

4. Day to Day working of business

Q.

Rizul after leaving his job wanted to start a Private Limited Company with his son. His son was keen that the company should start manufacturing of mobile phones with some unique features. Rizul felt that mobile phones are prone to quick obsolescence and a heavy fixed capital investment would be required regularly in this business. Therefore, he convinced his son to start a furniture business. Identify the factor affecting fixed capital requirements which made Rizul to choose furniture business over mobile phones.

1. Finance alternatives

2. Technology upgradation

3. Choice of technique

4. All of the above

Q. If raw materials are easily available and there is a ready supply of raw materials and inputs then firms can manage with less amount of working capital also as they need not maintain any stock of raw materials. State true or false.

1. True
2. False

Q.

Every manager has to take three major decisions while performing the role of finance manager. Explain.

Q.

Write a short note on Short term investment decisions?

Q. Give the meaning of 'Investment ' and 'Financing' decision of financial management.

Q. What do you mean by management of fixed capital?

Q. How conditions in financial market influence capital structure decision? Explain any other two factors.

Q. Identify the decision taken in financial management which affects the liquidity as well as the profitability of business.

Q. Neelabh is engaged in 'Transport Business' and transports fruits and vegetables to different states. Staring the reason in support of your answer, identify the working capital requirements of Neelabh. Neelabh also wants to expand and diversify his transport business.

Q. ________ is known as fixed capital.

1. Furniture and fixtures
2. Plant and machinery
3. All of the above
4. Land and building

Q.

If raw materials are easily available and there is a ready supply of raw materials and inputs then firms can manage with less amount of working capital also as they need not maintain any stock of raw materials. State true or false.

Q. Harish is engaged in warehousing business and his warehouses are generally used by businessmen to store fruits. Identify the working capital requirements of Harish giving reason in support of your answer. Further Harsh wants to expand and diversify his warehousing business.

Q. Manish is engaged in the business of garments manufacturing. Generally, he used to sell his garments in Delhi. Identify the working of your answer. Further Manish wants to expand and diversify has garments business.

Q. If raw materials are easily available and there is a ready supply of raw materials and inputs then firms can manage with less amount of working capital also as they need not maintain any stock of raw materials. State true or false.

1. True
2. False

Q. The funds spent on fixed assets remain invested in the business for a __________.

1. For an year
2. None of the above
3. Short period of time
4. Long period of time

Q. Amit is running an 'Advertising Agency' and earning a lot by providing this service to bidding industries. State whether the working capital requirement of the firm will be 'less' or 'more'. Give reason in support of your answer.

Q. Attempt the following
What are the factors affecting requirement of fixed capital?

Q. What kinds of financial decisions are taken in financial management?

Q. you ___________ , if you sold this phone and bought a new one.
a) would be better-off
b) will be better-off

Q. Differentiate between fresh weight and dry weights of a plant tissue.

Q.

State three reasons of calling raw material and money as working capital.

Q. Explain any four factors which affect the fixed capital requirements of a business?

Q. The term 'capital structure' implies ____________.

1. Share capital+Reserves+Long-Term Debts
2. Share Capital+Long and Short-Term Debts
3. Share Capital+Long-Term Debts
4. Equity and Preference Share Capital