Question

The source of fixed capital is not

• A. Issue of debentures
• B. Issue of shares
• C. Creditors
• D. Loan from IFCI

Hint:

Fixed capital is sourced from long-term financing, whereas creditors typically provide short-term working capital.

Answer 1

The Correct Option is C

Step 1: Understand fixed capital.
Fixed capital refers to long-term capital used to acquire assets for the business that are not meant for resale. It includes funds raised through long-term sources like the issue of shares and debentures.
Step 2: Evaluate the options.
- Fixed capital is raised through long-term financial sources like issuing shares, debentures, or loans from institutions such as the IFCI. - Creditors typically provide short-term financing and are not a source of fixed capital.
Step 3: Conclude.
Creditors provide short-term capital, not fixed capital, which is required for long-term investments.
Final Answer: \[ \boxed{\text{Creditors}} \]