Sunflag Iron Ltd. is manufacturing steel at its plant in India. It is enjoying increased demand for its steelas economic growth of the country is about 8%. It is planning to set up a new plant to avail the benefits of increased demand.

It is estimated that it will require about Rs. 4,000 crore for setting up of plant and about Rs. 600 crorefor other expenses to start the new plant. To collect the above mentioned funds, the sources to be used and the quantity to be collected from different sources had to be considered.

(a) Identify the above discussed concept and give its meaning.

(b) Explain any two factors that affect the concept identified in (a) above.