Choose the pair of factors which does not affect requirement of Fixed Capital.

Scale of operations and seasonal factors

The correct answer is option (2)- Scale of operationas and seasonal factors.

The pair of factors which does not affect the requirement of Fixed Capital is Scale of operations and seasonal factors. Seasonal factors affects working capital requirements.

The type of business has a bearing upon the fixed capital requirements. For example, a trading concern needs lower investment in fixed assets compared with a manufacturing organisation; since it does not require to purchase plant and machinery, etc.

Fixed capital refers to investment in long-term assets. Management of fixed capital involves the allocation of a firm’s capital to different projects or assets with long-term implications for the business. There are 8 factors affecting the fixed capital requirements-

(1) nature of business

(2) scale of operation

(3) choice of technique

(4) growth prospects

(5) financial alternatives

(6) level of collaboration

(7) Technology Upgradation

(8) Diversification