Computers become obsolete fast and are replaced much sooner than furniture. The requirement of fixed capital, hence, is more for the firms dealing in computers.
Identify the factor affecting fixed capital from the above para.
Computers become obsolete fast and are replaced much sooner than furniture. The requirement of fixed capital, hence, is more for the firms dealing in computers.
Identify the factor affecting fixed capital from the above para.
Solution
✅ Correct Option: 3
Computers become outdated quickly due to rapid advances in technology and therefore have to be replaced more often than items like furniture. The firm must keep upgrading its fixed assets, increasing fixed capital needs. This factor is technology upgradation, not scale of operation, growth prospects, or choice of technique.
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