c) Give two differences between fixed capital and circulating capital
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Fixed capital is the money invested for longer than one production cycle (typically one year). Circulating capital typically includes current assets, while fixed capital can include fixed and long-term assets. Economist Karl Marx theorizes that fixed capital is also circulating, the circulation cycle is just longer.
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Fixed capital - Fixed capital investments represent the acquisition and maintenance of long-term assets. A fixed capital investment can be tangible asset, such as a building, or an intangible asset, such as an intellectual property. Working capital refers to the deployment of financial resources in the day-to-day business operations.
Circulating capital - DescriptionCirculating capital includes intermediate goods and operating expenses, i.e., short-lived items that are used in production and used up in the process of creating other goods or services. This is roughly equal to intermediate consumption
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Fixed capital - Fixed capital investments represent the acquisition and maintenance of long-term assets. A fixed capital investment can be tangible asset, such as a building, or an intangible asset, such as an intellectual property. Working capital refers to the deployment of financial resources in the day-to-day business operations.
Circulating capital - DescriptionCirculating capital includes intermediate goods and operating expenses, i.e., short-lived items that are used in production and used up in the process of creating other goods or services. This is roughly equal to intermediate consumption
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