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Benefits and Limitations of Capital Intensive Operations
What are the benefits of capital intensive operations for businesses?
Capital intensive operations allow businesses to benefit from economies of scale, increased productivity, and higher profit margins. They often involve the use of advanced technology and automation.
What are the limitations or challenges of capital-intensive operations?
Capital-intensive operations face challenges such as high initial investments, long payback periods, high maintenance and operating costs, dependence on economic conditions, technological obsolescence, and potential difficulties in adapting to market changes. They may also require substantial financial resources and expertise to manage and maintain capital-intensive assets effectively.
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