Identify the forms of capital given below. Give reasons for your answer:
(i) Steel
(ii) Furniture in a house
(iii) A house on rent
(iv) Utensils in a house

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Solution

(i) Steel is a floating capital since it can be used for many purposes.
(ii) Furniture in a house belongs to sunk capital as it can be used for only one purpose.
(iii) A house on rent belongs to floating capital as it can be used for many purposes.
(iv) Utensils in a house belong to sunk capital as it can be used for one purpose.

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