The Indian Electric company manufactures two popular brand of ceiling fans, Cool home and A1 Bahar. Each fan is processed through two main departments: machine shop, assembly and testing shop which have respectively 1200 machine hours and 1600 man hours of available capacity per day. Each cool home fan requires 3 hours of capacity of machine shop and one hour capacity of assembly and testing shop. Similarly each A1 bahar fan requires 2 hours of machine shop and assembly shor capacity. The market for the two models has been surveyed recently which suggests that a maximum of 250 nos of Cool Home and 200 nos of Al Bahar can be sold per day.
1. Compare and contrast the potential liability of owners of proprietorships, partnerships (general partners), and corporations.
2. What is meant by Working capital? How is it calculated? Explain the determinants of working capital requirements.