Question

Answer the following question:
You are the finance manager of a newly established company. The Directors have asked you to determine the amount of fixed capital requirement for the company. Explain any five factors that you will consider while determining the fixed capital requirement for the company.

Answer 1

Factors that need to be kept in mind while determining the fixed capital requirement are:-

1. Nature of the business.

2.Technical upgradation.

3. scale of operations.

4. Diversification.

5.Collaborations.

6. Availability of finance and leases.