The requirement of Fixed Capital isn't affected by:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Capital structure of other companies

Fixed capital is the money invested in long-term assets such as land, buildings and machinery.

Option (1) Scale of operations — A factor affecting fixed capital (Incorrect). A larger firm needs bigger plants and more machines.
Option (2) Nature of business — A factor affecting fixed capital (Incorrect). A trading firm needs few fixed assets; a manufacturing firm needs a great deal of them.
Option (3) Capital structure of other companies — Not a factor affecting fixed capital (Correct). How other companies mix debt and equity tells a firm nothing about the machines and buildings it needs. Fixed capital depends on the firm’s own business.
Option (4) Financing alternatives — A factor affecting fixed capital (Incorrect). If assets can be taken on lease, less money needs to be locked up in buying them.

NCERT (2026-27 Edition): “Factors affecting the Requirement of Fixed Capital 1. Nature of Business: 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.”

“2. Scale of Operations: A larger organisation operating at a higher scale needs bigger plant, more space etc. and therefore, requires higher investment in fixed assets when compared with the small organisation.”

“7. Financing Alternatives: A developed financial market may provide leasing facilities as an alternative to outright purchase. …”

“Factors affecting the Choice of Capital Structure … 14. Capital Structure of other Companies: A useful guideline in the capital structure planning is the debt-equity ratios of other companies in the same industry. …”