Choose whether the statement is true/false:

The tangible assets like tools, machines, and buildings that can be used in production over many years are called fixed capital.

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Detailed Solution

The above statement is true.
The tangible assets like tools, machines, and buildings that can be used in production over many years are called fixed capital.
From essential equipment like a farmer's plough to complex machines like generators, turbines, computers, etc., tools and machinery come in many shapes and sizes. The term "fixed capital" refers to assets like tools, machines, and buildings that can be employed in production for many years. The portion of a company's total capital investment spent on tangible goods like buildings, cars, and equipment that remain in the business for more than one accounting cycle, or technically forever, is fixed capital. A company can purchase fixed assets that can also be leased for an extended period. Fixed capital refers to materials that can be employed in manufacturing for an extended period.

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