Yogesh, a businessman, is engaged in the purchase and sale of ice-creams. Identify his working capital requirements by giving reasons to support your answer. Now, he is keen to start his own ice-cream factory. Explain any two factors that will affect his fixed capital requirements.
Answers
Answer:
working capital
cream
icecream buiscuit
milk
money
fixed capital
machine for manufacturing of icecream
factory at accessible place
Answer:
The working capital requirements of Yogesh will be less as he is engaged in trading business.
The two factors that will affect his fixed capital requirements when he will start his own ice-cream factory are described below:
Level of collaboration: If Yogesh gets an opportunity to set up his factory in collaboration with another enterprise, his fixed capital requirements will reduce considerably else his fixed capital requirements will be more.
Financial alternatives available: If Yogesh is able to get the place to start the factory and machinery on lease, his fixed capital requirements will reduce considerably. Whereas if he decides to purchase them, his fixed capital requirements will be more.