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CBSE-Business-studies-2016--->View question

Identify the factor affecting fixed capital requirements which made Rizul Bhattacharya to choose furniture business over mobile phones. -CBSE business studies 2016 class 11

Rizul Bhattacharya after leaving his job wanted to start a Private Limited Company with his son. His son was keen that the company may start manufacturing of Mobile-phones with some unique features. Rizul Bhattacharya felt that the mobile phones are prone to quick obsolescence and a heavy fixed capital investment would be reuired regularly in this business. Therefore he convinced his son to start a furniture business. Identify the factor affecting fixed capital requirements which made Rizul Bhattacharya to choose furniture business over mobile phones. 


Asked On2017-07-19 16:02:28 by:milan-ransingh

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Answer:
‘Technology upgradation’ is the factor affecting fixed capital requirements.
Note on Technology upgradation:
Industries in which technology upgradation is fast need more amount of fixed capital as when new technology is invented old machines become obsolete and they need to buy new plants and machinery whereas companies where technological upgradation is slow they require less fixed capital as they can manage with old machines.

Answerd on:2017-07-20 Answerd By:Aparna-Dasgupta

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