It issued IPO in the market last year. Further the company will have to bear inventory costs as for the ACs an inventory will have to be maintained. Now 31st December had passed and Finance Minister of India presented Budget 2017-18 on 1st February 2017 which is one month ahead of budget presentation as per the tradition. Further use of equity can completely dilute the control into the hands of the shareholders. INVESTMENT DECISIONS He thinks of expanding his business. What do you think is going to be the impact of this collaboration on the fixed capital investment of ‘Hamara Bank’? Why? What do you think will be the working capital requirement of his company? The part of profit which is distributed by the company to its shareholders is known as dividend. The sweaters are worn in many countries and they are of very high quality. What do you think is going to be the working capital requirement of this business? For a manufacturing plant the fixed capital requirement is high since the purchase of plant and machinery, equipments, etc. It is the proportion of Debt and Equity in raising funds for doing business. Raising funds through debt involves low floatation costs. Answer: Question 7. An AC manufacturing company wants to open a plant in Delhi. Capital Budget: The main two components of Capital Budget are: Capital Receipts refer to those receipts which either create liability or cause a reduction in the assets of the Government. The fixed capital requirement generally is low in trading business. The manager in charge is taking care of all the operations. Grants received from World Bank: It is a revenue receipt as it neither creates any liability nor reduces any asset of the Government. Question 9. A firm has decided not to issue equity this year. ... CBSE Class 12 Economics Government Budget And The Economy. Which concept of management has been highlighted in the above case? Keeping the concern of raising funds alive a company decides to go for debenture as the final choice. Rizul Bhattacharya after leaving his job wanted to start a Private Limited Company with his son. Newspapers appreciate the steps taken by the management. Revenue Expenditure refers to the expenditure, which neither creates any liability nor causes a reduction in any liability of the Government. KJ Ltd. is manufacturing trucks at its manufacturing unit in Kolkata. Why do you think the financial risk in the above mentioned industry is going to be dangerous for the companies? ‘Heartbeat Denim’ is the number one performing jeans manufacturing company since last 30 years. Answer: There is availability of enough cash in the company and good prospects for growth in future. Interest paid by the company to its debenture holders is tax deductible. The government aims to influence the distribution of income by imposing taxes on the rich and spending more on the welfare of the poor. 2 in case study (l) How Return on Investment would matter? The concept of management highlighted in the above case is ‘Importance of fixed capital investment’. So he decides to go ahead with the project B. Shobhit wants to start a movie hall so he decides to evaluate the feasibility of starting the project. The other term used for long term investment is ‘Capital Budgeting Decision’. Recently his company pumped an amount of Rs.50 crores in a project and he knows this project can affect the returns of the firms in the long run both positively as well as negatively. The two other two parties besides government who can file a case under Consumer Protection Act 1986 are any consumer and any registered consumers’ association. Share on diversification ‘ White White sheets ’ is a manufacturing plant the fixed capital also! 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