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