Question

Fixed capital is required

• A. For payment of routine expenses
• B. For purchase of land
• C. For purchase of stock
• D. For payment to creditors

Hint:

Fixed capital is primarily invested in assets that provide long-term support for the business, such as land and buildings.

Answer 1

The Correct Option is B

Step 1: Understand fixed capital.
Fixed capital refers to long-term funds used to acquire assets that will support the business over time. This typically involves purchasing assets such as land, machinery, and buildings.
Step 2: Evaluate the options.
- Fixed capital is used for long-term investments, such as land and property, which are critical for the business's infrastructure. - The other options relate to ongoing operational expenses or short-term financial requirements, not long-term capital investment.
Step 3: Conclude.
The purchase of land is a key use of fixed capital in business.
Final Answer: \[ \boxed{\text{For purchase of land}} \]