What is the name of funds required for purchasing fixed assets, working capital, and fixed capital?

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Detailed Solution

The funds required for purchasing fixed assets are called fixed capital, while the funds used for day-to-day operations are called working capital. Every business needs funds to run smoothly. These funds are mainly divided into two types: fixed capital and working capital. Both are essential for the stability and growth of a company.

Fixed Capital

Fixed capital is the money used to purchase long-term assets that help in production and business operations.

Examples: Land, buildings, machinery, furniture, vehicles.
Long-term investment, not used up in one cycle.
Provides the base for production activities.

Working Capital

Working capital is the money used to manage daily operations.

Examples: Raw materials, salaries, electricity bills, rent, packaging.
Short-term requirement, constantly changing.
Ensures smooth business flow.

Aspect	Fixed Capital	Working Capital
Purpose	Purchase of long-term assets	Day-to-day expenses
Duration	Long-term investment	Short-term requirement
Examples	Land, machinery, buildings	Salaries, raw materials, bills