Setting up a small manufacturing unit like sugarcane crushing machine requires:

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Fixed Capital

Working Capital

Both 1 and 2

Only 1

answer is C.

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Detailed Solution

Setting up a small manufacturing unit like a sugarcane crushing machine requires fixed capital and working capital. Raw sugarcane may be purchased from other farmers, crushed and converted into jaggery. This jaggery can then be processed into jaggery and sold in the city market.
Fixed capital includes the assets needed to initiate and conduct business and are not consumed or destroyed while producing a good or service.
Working capital refers to the difference between a company's current assets (such as cash, inventories of raw materials and finished goods) and its current liabilities, such as accounts payable and debts.
Therefore, fixed capital is in the form of a sugarcane crushing machine, and working capital are in the form of buying sugarcane from other farmers for crushing and paying an electricity bill for running the machine.

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