Question

there are various factors affecting the requirement of working capital. justify​

Answer 1

Answer:

Duration and the length of production cycle affect the amount of funds required for raw materials and expenses. Different firms allow different credit terms to their customers. ... A liberal credit policy results in higher amount of debtors, increasing the requirement of working capital.

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Answer 2

Explanation:

Main factors affecting the working capital are as follows: (1) Nature of Business: ... In the case of manufacturing business it takes a lot of time in converting raw material into finished goods. Therefore, capital remains invested for a long time in raw material, semi-finished goods and the stocking of the finished goods.

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