FIXED CAPITAL Meaning and
Definition
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Fixed capital refers to the physical assets or resources that are used repeatedly in the production process to generate goods or services. These assets are typically long-term in nature and are not consumed or depleted during the production process but rather provide ongoing input.
Fixed capital includes physical infrastructure such as land, buildings, machinery, equipment, vehicles, and other long-lasting assets that are essential for conducting business operations. These assets are necessary for the production of goods or services and are utilized over a prolonged period of time.
Unlike "working capital," which refers to the short-term assets and liabilities necessary for day-to-day operations, fixed capital represents the durable and more substantial investments made by businesses to establish their operations and support long-term growth.
The value of fixed capital is measured based on its acquisition cost or historical cost, which includes the initial purchase price as well as any additional costs incurred to bring the asset into productive use, such as installation, transportation, or improvements.
Fixed capital is essential for the functioning and expansion of businesses across various industries. Proper management and investment in fixed capital are crucial for improving production efficiency, maintaining competitiveness, and facilitating future growth and development.
Common Misspellings for FIXED CAPITAL
- dixed capital
- cixed capital
- vixed capital
- gixed capital
- tixed capital
- rixed capital
- fuxed capital
- fjxed capital
- fkxed capital
- foxed capital
- f9xed capital
- f8xed capital
- fized capital
- ficed capital
- fided capital
- fised capital
- fixwd capital
- fixsd capital
- fixdd capital
- fixrd capital
Etymology of FIXED CAPITAL
The term "fixed capital" emerged in the late 18th century, derived from the combination of two words:
1. Fixed: The word "fixed" comes from the Latin word "fixus", which means to fasten or make stable. It gained the meaning of being stable or unchanging in the late Middle English period.
2. Capital: "Capital" comes from the Latin word "caput", meaning head. It initially referred to the head of a person as a symbol of importance, and gradually evolved to represent wealth or resources that are essential for the production of goods and services.
When these two words are combined, "fixed capital" refers to the part of capital investment that is not immediately used up in the production process, such as machinery, buildings, and other durable assets.
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