Factors affecting the Requirement of Fixed Capital

•      Choice of Technique: Some organisations are capital intensive whereas others are labour intensive. A capital-intensive organisation requires higher investment in plant and machinery as it relies less on manual labour. The requirement of fixed capital for such organisations would be higher. Labour intensive organisations on the other hand require less investment in fixed assets. 
•  Growth Prospects: Higher growth of an organisation generally requires higher investment in fixed assets
• Technology Upgradation: In certain industries, assets become obsolete sooner. Consequently, their replacements become due faster
•  Financing Alternatives: A developed financial market may provide leasing facilities as an alternative to outright purchase