Question : Which of the following statements is incorrect?
Option 1: Fixed capital affects the long term growth of the business.
Option 2: Fixed capital involves large amount of funds.
Option 3: There is no risk involved in fixed capital.
Option 4: None of the above
Answer (1)
21st Jan, 2024
Correct Answer:
There is no risk involved in fixed capital.
Solution : Capital budgeting in decisions involve huge funds. It affects return of the firm as a whole in the long term. So these decisions influence the overall business risk complexion of the firm.
Hence, option C is correct.
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