Question

The part of regular working capital is

• A. Permanent working capital
• B. Variable working capital
• C. Net working capital
• D. None of these

Hint:

Regular working capital = Minimum funds always required for operations.

Answer 1

The Correct Option is A

Step 1: Understanding regular working capital.
Regular working capital refers to the minimum level of current assets required to maintain daily operations of a business.
Step 2: Nature of permanent working capital.
Permanent working capital is the fixed minimum amount of working capital that a firm always needs.
It does not fluctuate with business activity and is essential for survival.
Step 3: Option analysis.
- (A) Permanent working capital: Correct, as it is a part of regular working capital.
- (B) Variable working capital: Fluctuates with seasonality, not part of regular capital.
- (C) Net working capital: Concept of difference between current assets and liabilities, not a direct part.
- (D) None of these: Wrong, since (A) is correct.
Step 4: Conclusion.
Permanent working capital is considered as part of regular working capital.