This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.
ScanSolve AI Answer
Step 1: Verify the accounting equation for each business Accounting equation: Current Assets = Current Liabilities + Capital Employed Capital Employed = Current Assets - Current Liabilities Calculations in table (all amounts in ₹): |c|c|c|c|l| Business & Current Assets & Current Liabilities & Capital Employed & Verification \\ A & 1,50,000 & 50,000 & 1,50,000 - 50,000 = 1,00,000 & 1,50,000 = 50,000 + 1,00,000 \\ B & 2,00,000 & 50,000 & 2,00,000 - 50,000 = 1,50,000 & 2,00,000 = 50,000 + 1,50,000 \\ C & 3,00,000 & 1,00,000 & 3,00,000 - 1,00,000 = 2,00,000 & 3,00,000 = 1,00,000 + 2,00,000 \\ D & 5,00,000 & 1,50,000 & 5,00,000 - 1,50,000 = 3,50,000 & 5,00,000 = 1,50,000 + 3,50,000 \\ E & 6,00,000 & 2,00,000 & 6,00,000 - 2,00,000 = 4,00,000 & 6,00,000 = 2,00,000 + 4,00,000 \\ The equation holds for all businesses. Step 2: Calculate Working Capital for each business Formula: Working Capital = Current Assets - Current Liabilities Calculations (all amounts in ₹): Business A: 1,50,000 - 50,000 = 1,00,000 Business B: 2,00,000 - 50,000 = 1,50,000 Business C: 3,00,000 - 1,00,000 = 2,00,000 Business D: 5,00,000 - 1,50,000 = 3,50,000 Business E: 6,00,000 - 2,00,000 = 4,00,000 Summary table: |c|c| Business & Working Capital (₹) \\ A & 1,00,000 \\ B & 1,50,000 \\ C & 2,00,000 \\ D & 3,50,000 \\ E & 4,00,000 \\ Working Capital: A=₹1,00,000; B=₹1,50,000; C=₹2,00,000; D=₹3,50,000; E=₹4,00,000