Question

What do you mean by fixed capital?

Answer 1

Fixed capital is the portion of the total capital outlay of a business invested in physical assets such as factories, vehicles, and machinery that stay in the business. Those materials which can be used in production over many years are called fixed capital. Fixed capital is capital or money that we invest in fixed assets. In other words, money that we invest in assets of a durable nature. These are assets that we repeatedly use over a long period. We do not resell fixed assets as part of our everyday business operations. We use fixed assets in the production of our company’s income or for administrative purposes.