Raw materials and money in hand are called:

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Fixed capital

Working Capital

Investment

None of the above

answer is B.

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Detailed Solution

Raw materials and money in hand are called Working Capital. The assets required to start and run a firm that is not used up or destroyed during the creation of a good or service are referred to as fixed capital. The difference between a company's current assets (such as cash, inventories of raw materials and completed items), and its current liabilities (like accounts payable and loans), is working capital. Raw materials and cash on hand are two examples of working capital because they are necessary for the efficient and regular operation of the business. They play a crucial role in the transformation of inputs into desired outputs.

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