The funds spent on fixed assets remain invested in the business for a __________.

Short period of time

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Long period of time

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For an year

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None of the above

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Solution

The correct option is D Long period of time
Fixed assets are those which remains in the business for more than one year, usually for much longer period, e.g., plant and machinery, furniture and fixture, land and building, vehicles etc. Decision to invest in fixed assets must be taken very carefully as the investment is usually quite large and for a long period of time.

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