Question

New Delhi is the most polluted city in the world and statistics reveals that India has 14 out of 15 most polluted cities in the world. This has resulted into a dramatic increase in the sale of home air purifiers, keeping in view the increasing demand of these air purifiers sudh Hasa Ltd.' has developed a low cost home air purifier in its R&D Lab. The prices of these devices range from 2,000 to 5000 depending upon the type of pollutant these purifiers remove. The company has estimated that a commercial production of 2,00,000 units per year may cost the company 700 per unit. For this capital of 35 crores will be required. The company decided to have both equity and debt in its capital structure. Explain any four factors that the company should consider while deciding its capital structure ​

Answer 1

Answer:

New Delhi is the most polluted city in the world and statistics reveals that India has 14 out of 15 most polluted cities in the world. This has resulted into a dramatic increase in the sale of home air purifiers, keeping in view the increasing demand of these air purifiers sudh Hasa Ltd.' has developed a low cost home air purifier in its R&D Lab. The prices of these devices range from 2,000 to 5000 depending upon the type of pollutant these purifiers remove. The company has estimated that a commercial production of 2,00,000 units per year may cost the company 700 per unit. For this capital of 35 crores will be required. The company decided to have both equity and debt in its capital structure. Explain any four factors that the company should consider while deciding its capital structure