Pinnacle Ltd deals in the sale of stationary and office furniture. They source the finished products from reputed brands who give them four to six months credit. Seeing the demand for electronic items,they are also planning to market these items by opening outlets throughout India. For this, they have decided to join hands with a Japanese electronic goods manufacturer.
Identify and state any two factors that would affect the fixed capital requirement of Pinnacle Ltd as discussed above.

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Solution

Two factors that would affect
(i) Diversification: It will increase the fixed capital requirements as the investment in fixed capital will increase.
(ii) Level of Collaboration: Collaboration reduces the level of investment in fixed assets.

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Two factors that would affect(i) Diversification: It will increase the fixed capital requirements as the investment in fixed capital will increase.(ii) Level of Collaboration: Collaboration reduces the level of investment in fixed assets.

Two factors that would affect
(i) Diversification: It will increase the fixed capital requirements as the investment in fixed capital will increase.
(ii) Level of Collaboration: Collaboration reduces the level of investment in fixed assets.