Question
Differentiate between fixed capital and working capital?
S.No. | fixed capital | working capital |
1. | Tools, machines and buildings that can be used in production are called fixed capital. | Raw materials and money in hand required for production is called working capital. |
2. | Tools, machines, buildings can be used in production over many years. | Raw materials and money in hand are used up in production. |
3. | Example: Tools and machines range from very simple tools such as plough to sophisticated machines such as generators, turbines, computers, etc. | Example: Yarn used by the weaver, the clay used by the potter, etc. |
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