True or False: In general, excess capacity means more external financing is required to support increases...

True or False: In general, excess capacity means more external financing is required to support increases in operations than would be needed if the firm previously operated at full capacity

Expert Solution

True

If company wants to expand the excess capacites, they need external funding for the day to day operations. Company has to convert the raw materials to finished goods and manage the accounts receiavbles which takes few months. On a rotational basis, comapny needs funding to take care of the working capital needs.

jeff jeffy answered 2 years ago

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