Which of the following is NOT a factor affecting working capital requirements?

Option 1 -> Production Cycle: Longer production cycles increase the time between cash outflow (for raw materials) and cash inflow (from sales), thereby increasing working capital requirements.

Option 2 -> Inflation: Rising prices require more funds to maintain the same level of inventory and receivables, directly impacting working capital needs.

Option 3 -> Growth Prospects: Higher growth means increased sales volume, requiring more investment in inventory, receivables, and other current assets, thus increasing working capital requirements.

Option 4 -> Floatation Cost: These are one-time expenses incurred when issuing new securities (stocks/bonds) for raising capital. They are financing costs, not operational factors affecting working capital needs.

Hence, Option 4: Floatation Cost -> Floatation costs relate to fundraising and capital structure decisions, not to the operational working capital requirements of a business. Working capital is determined by operational factors like production cycle, business growth, and market conditions, not by the costs of raising long-term capital -> correct