Question

The capital which can be put to alternative uses is called

• A. Fixed capital
• B. Working capital
• C. Sunk capital
• D. Floating capital

Hint:

Think 'floating' as in not tied down. Floating capital can be moved or used for different things, unlike 'sunk' capital which is stuck in one investment.

Answer 1

The Correct Option is D

Floating capital (or circulating capital) refers to assets that can be easily converted or adapted for different uses or purposes. This includes things like cash, raw materials, or generic machinery that isn't specialized for a single task. Sunk capital, by contrast, is capital that cannot be recovered or used for an alternative purpose once invested.