Insufficient working capital results in __________.

The correct answer is: D. Lack of smooth flow of production.

Insufficient working capital is a common problem for businesses of all sizes. It can lead to a number of problems, including:

• Lack of smooth flow of production: When a business doesn’t have enough working capital, it can’t pay its suppliers on time. This can lead to disruptions in production, as suppliers may not be willing to continue to provide goods and services without being paid.
• Inability to meet customer demand: If a business doesn’t have enough working capital, it may not be able to meet customer demand. This can lead to lost sales and damage to the business’s reputation.
• Increased costs: When a business doesn’t have enough working capital, it may have to borrow money at high interest rates. This can increase the business’s costs and make it more difficult to make a profit.
• Reduced investment in new products and services: When a business doesn’t have enough working capital, it may not be able to invest in new products and services. This can limit the business’s growth potential.

To avoid the problems associated with insufficient working capital, businesses should carefully manage their cash flow and make sure they have enough money on hand to cover their expenses.

Here is a brief explanation of each option:

• A. Block of cash: This is not a direct result of insufficient working capital. A block of cash can occur for a number of reasons, such as a business not having enough customers or not being able to sell its products.
• B. Loosing interests: This is also not a direct result of insufficient working capital. A business can lose interest on its cash if it does not invest it in something that earns interest, such as a savings account or a certificate of deposit.
• C. Lack of production: This is a direct result of insufficient working capital. If a business doesn’t have enough money to pay its suppliers, it will not be able to get the materials it needs to produce its products. This can lead to a lack of production and a loss of sales.