Question

Three differences between fixed capital and working capital. CLASS 9 CHAPTER 1 PLZ HELP ME WITH THE ANSWER

Answer 1

$\large \sf \: Answer : \:$

The third requirement for production of goods and services is Physical Capital that is the variety of inputs required at every stage during production. Fixed Capital and Working Capital are the items that come under it.

Differences between Fixed & Working Capital :

$\purple{\sf\: Fixed \: Capital :}$

• Tools, machines, buildings etc can be used in production over many years comes under Fixed Capital.

• It ain't liquid at all.

• Used to acquire non-current assets for the company.

$\purple{\sf \: Working \: Capital :}$

• Raw materials such as the yarn used by the Weaver & the clay used by the Potter comes under Working Capital.

• It's highly liquid.

• Used to acquire current assets for the company.