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Question
______ capital is used once in production whereas ______ capital can be used for long time.
Options
Circulating; Fixed
Fixed; Working
Sunk; Floating
Real; Debt
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Solution
Circulating capital is used once in production whereas fixed capital can be used for long time.
Explanation:
- Circulating capital (also known as working capital) refers to assets used up in the production process, such as raw materials, that need to be replaced frequently.
- Fixed capital refers to long-term assets such as machinery, buildings, and equipment that are used for a long period in the production process without being consumed.
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