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FINANCIAL MANAGEMENT — OCM STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceOCMFINANCIAL MANAGEMENT2 Marks
Question
How does shortage of raw material affect capital requirement?
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Answer

If a business needs raw material that is available in limited quantity or whose supply is irregular or is available in certain season only, then such raw material need to be kept in stock for continuous production. Hence, the company needs more capital for production.

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