The rate of return on capital is exceptionally high in _____.

Under–capitalisation

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Over–capitalisation

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Working capital

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Fixed capital

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Solution

The correct option is A
Under–capitalisation

Answer (a) Under–capitalisation
Explanation: An organisation is supposed to be under-capitalised when it is procuring especially higher benefits when compared with different organisations or the worth of its resources is altogether higher than the capital raised.

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