The correct answer is: A. larger
Working capital is the difference between a company’s current assets and its current liabilities. It is a measure of a company’s liquidity and ability to meet its short-term obligations.
The size of a business unit is a major factor in determining its working capital requirements. Larger businesses typically have higher levels of current assets, such as inventory and accounts receivable, and lower levels of current liabilities, such as accounts payable and short-term debt. This is because larger businesses have more customers and suppliers, and they typically have longer payment terms with their customers and suppliers.
As a result, larger businesses typically have higher working capital requirements than smaller businesses.
Here is a brief explanation of each option:
- Option A: Larger. This is the correct answer. As explained above, larger businesses typically have higher working capital requirements than smaller businesses.
- Option B: Lower. This is incorrect. Larger businesses typically have higher working capital requirements than smaller businesses.
- Option C: No change. This is incorrect. Larger businesses typically have higher working capital requirements than smaller businesses.
- Option D: Fixed. This is incorrect. Working capital requirements can change over time, depending on a number of factors, such as the size of the business, the industry, and the economic environment.