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Three Marks Question.
Explain the fixed capital and working
Captial.
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Fixed capital refers to the investment of the enterprise in long term assets of the company. Working capital means the capital invested in the current assets of the company. Comprise of. Durable goods whose useful life is more than one accounting period.
Working capital is utilized for payments related to day to day operations such as raw materials, wages, rent and other utilities. Fixed capital is utilized for purchasing various fixed assets such as plant and machinery, equipment, furniture, vehicles etc.
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