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Fixed capital is also referred as circulating capital.

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Question

Fixed capital is also referred as circulating capital. 

Options

  • True

  • False

MCQ
True or False
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Solution

The statement is False.

Explanation:

Long-term investments in land, buildings, machinery, and equipment with no immediate cash flow are called fixed capital. These support business processes. However, circulating capital includes short-term assets like inventories, raw materials, and cash that are consumed and renewed during the economic cycle. 

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Chapter 1: Introduction To Corporate Finance - Exercises [Page 11]

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Balbharati Secretarial Practice [English] Standard 12 Maharashtra State Board
Chapter 1 Introduction To Corporate Finance
Exercises | Q 1. D) 4. | Page 11

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