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Answer: Fixed capital is the capital required to acquire fixed (long-term) assets such as land, buildings, plant and machinery, furniture and vehicles.

These assets are used in the business for many years, so the funds are locked up for a long period. Fixed capital is therefore raised from long-term sources such as equity shares, preference shares, debentures, long-term loans and retained earnings. The amount needed depends on the nature and size of the business, the technology used and the scope for leasing.

Doubtly AI · 28 Oct 2026 AI-verified · Oct 2026 Report
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