Question

Elz Fragrances Ltd manufactures hair products and skin care products. The company wants to diversify into fashion garments for women. It is also planning to open exclusive retail outlets in all metropolitan cities of the country in coming 5 years. On the basis of given information, name and explain any five factors affecting the fixed capital requirement of Elz Fragrances Ltd. (other than the factors highlighted in the above case).​

Answer 1

Answer:

factors affecting fixed capital requirement

1. nature of business :-

manufacturing company = more fixed capital

trading Company = less fixed capital

2. scale of production :-

large scale = more requirement

small scale = less requirement

3. technique of production :-

labour intensive = less requirement

capital intensive = more requirement

4. growth prospects :-

higher growth opportunity = more requirement

lower growth opportunity = less requirement