Question

Distinguish between sunk capital and floating capital

Answer 1

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.