Which of the following scenarios is NOT associated with a higher fixed capital requirement for a business?

When the raw material is not easily available

The correct answer is Option 1: When the raw material is not easily available

Availability of Raw Material: If the raw materials and other required materials are available freely and continuously, lower stock levels may suffice. If, however, raw materials do not have a record of un-interrupted availability, higher stock levels may be required. In addition, the time lag between the placement of order and the actual receipt of the materials (also called lead time) is also relevant. Larger the lead time, larger the quantity of material to be stored and larger shall be the amount of working capital required. Thus, when the raw material is not easily available, the working capital requirements will increase and there will be no impact on fixed capital requirements.

Let's consider the other options:

1. Capital-intensive techniques of production are used: Capital-intensive production techniques typically require significant investments in fixed assets such as machinery, equipment, and infrastructure. Therefore, this circumstance would likely increase the fixed capital requirement.

2. The growth prospects of a company are high: High growth prospects often necessitate expansion of production capacity, which would require additional fixed capital investments to accommodate increased demand and production volumes.