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Question
Explain the following term/concept:
Fixed capital
Solution
Fixed capital is capital used to buy fixed assets that are used for a longer period of time in the business. These assets are not meant for resale. In simple words, fixed capital refers to capital invested in acquiring fixed assets. It stays in the business for a long period, almost permanently. Examples of fixed capital are capital used for purchasing land and buildings, furniture, plant and machinery, etc. Such capital is required at the time of the establishment of a new company.
RELATED QUESTIONS
Match the correct pairs:
| Group 'A' | Group 'B' | ||
| (1) | Working capital | (a) | Redeemed capital |
| (2) | Equity share capital | (b) | Secretary |
| (3) | Share warrant | (c) | Shares do not have distinctive numbers |
| (4) | Recommendation of dividend | (d) | Fixed assets |
| (5) | Fungibility | (e) | The link between SEBI and Depository |
| (f) | Board of Directors | ||
| (g) | Registered document | ||
| (h) | Sum of current assets | ||
| (i) | Bearer document | ||
| (j) | Permanent capital |
Select the correct answer from the options given below and rewrite the statement.
When the population is increasing at high rate, certain manufacturers find this as an opportunity to ______ business.
Initial planning of capital requirement is made by______.
Complete the sentence.
The process of converting raw material into finished goods is called ______
State any four factors affecting fixed capital requirement.
Justify the following statement.
Fixed capital stays in the business almost permanently.
Answer the following question.
Discuss the factors determining working capital requirement.
Explain the following term/concept:
Production Cycle
______ capital is used to carry out day-to-day business activities.
Distinguish between the following.
Fixed Capital and Working Capital.
Liberal credit policy creats a problem of bad debts.
Distinguish between the following.
Fixed Capital and Working Capital.
Liberal credit policy creates a problem of bad debts.
Liberal credit policy creates a problem of bad debts.
Distinguish between the following.
Fixed Capital and Working Capital.
Distinguish between the following.
Fixed Capital and Working Capital
Liberal credit policy creates a problem of bad debts.
Distinguish between the following.
Fixed Capital and Working Capital.
Distinguish between Fixed Capital and Working Capital.
