Neelabh is enaged in transport business, and transports fruits and vegatables to different states. Stating the reason in support of your answer, identify the working capital requirements of Neelabh, Neelabh also wants to expand and diversify his transport business, explain any two factors that will affect his fixed capital requirements.

Explanation

In the transportation businerss, lower amount of working capital required as it is a serivce Neelabh/Pranav would include, payment of salaries, fuel charges, maintenance of vehicles, etc. Factors Affecting the fixed Capital Requirments are :
(i) Growth prospects Businessman want s to expand his business, in such situation company requires higheer investment to meet the anticipated demand in future. Thus, the requirement of fixed capital will be higher.
(ii) Diversfication IF the businessman diversifies his business, this means larger amount of fixed capital required.