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Question
Justify the following statement.
Fixed capital stays in the business almost permanently.
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Solution
Justification:
- Fixed capital is the capital which is used to purchase fixed assets of the business.
- These fixed assets are used for a longer period of time and are not meant for resale.
- In other words, fixed capital refers to the capital invested for acquiring fixed assets.
- Examples of fixed capital are capital used for purchasing land and building, furniture, plant and machinery etc. Hence, fixed capital stays in the business almost permanently.
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RELATED QUESTIONS
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Match the correct pairs:
| Group 'A' | Group 'B' | ||
| (1) | Working capital | (a) | Redeemed capital |
| (2) | Equity share capital | (b) | Secretary |
| (3) | Share warrant | (c) | Shares do not have distinctive numbers |
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| (5) | Fungibility | (e) | The link between SEBI and Depository |
| (f) | Board of Directors | ||
| (g) | Registered document | ||
| (h) | Sum of current assets | ||
| (i) | Bearer document | ||
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