Question

State the meaning of fixed capital.

Hint:

Fixed capital = Long-term funds for fixed assets like land, building, machinery.

Answer 1

Definition: Fixed capital refers to the
long-term funds required by a business to acquire fixed assets such as land, buildings, machinery, and equipment.
Features of Fixed Capital:

It is invested in non-current assets that are used for several years.
It cannot be recovered easily in the short term.
It provides the base for carrying out production and operations.

Examples: Purchase of factory land, installation of heavy machinery, or construction of office buildings.
Conclusion: Fixed capital is essential for setting up and running the long-term infrastructure of any organization.