Which of the following is not a factor affecting the working capital requirements of a business firm?

Technology Upgradation

The correct answer is Option (4) → Technology Upgradation

Technology Upgradation → This affects capital expenditure (fixed capital requirements), not day-to-day working capital needs.

Factors that affect working capital requirements include:

• Production Cycle → Longer cycles require more working capital.

• Availability of Raw Material → Scarce or irregular supply increases the need for higher inventories, thus more working capital.

• Inflation → Increases prices of inputs, raising working capital needs.