Pranav is engaged in 'Transportation-Business'. Identify the working capital requirements of Pranav stating the reason in support of your answer. Pranav also wants to expand and diversify his Trasport-Business.
Explain any two factors that will affect this fixed capital requirements?

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Solution

(a) As it is a service industry,the working capital requirement would be less. Working capital requirement would be for the payment of salary,fuel charges ,maintenance of vehicle etc

(b)Factors effecting Capital Requirement:

Scale of Operations: Larger the spread of business activities,greater is the need of fixed capital.
Diversification: Diversification means running business in more products than merely in one product.Those organisation who wish to adopt diversification certainly need more fixed capital.

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Pranav is engaged in 'Transportation-Business'. Identify the working capital requirements of Pranav stating the reason in support of your answer. Pranav also wants to expand and diversify his Trasport-Business. Explain any two factors that will affect this fixed capital requirements?

Pranav is engaged in 'Transportation-Business'. Identify the working capital requirements of Pranav stating the reason in support of your answer. Pranav also wants to expand and diversify his Trasport-Business.
Explain any two factors that will affect this fixed capital requirements?