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Distinguish Between Sunk Capital and Floating Capital - Economics

Distinguish between sunk capital and floating capital

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Solution

Sunk capital and floating capital:

Sunk capital is the one which can only be put to a single use. It is also known as specialised capital. It always remains in a fixed place. For example, a printing machine.

Floating capital is the capital which can be used in alternative lines of production. It is also called free capital. For example, steel, wood, raw materials etc.

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