Write short notes on the following:
2. Types of capital
Capital can be classified into the following categories:
i. On the basis of ownership:
a. Private capital - It is owned by private individuals or institutes.
b. Public capital - It is owned by the government or a society.
ii. On the basis of mobility:
a. Sunk capital - It is the capital which is used only for a specific purpose. For instance, washing machines, which are used only for the specific purpose of washing clothes.
b. Floating capital - It is the capital which is used for a variety of purposes. For example - electricity.
iii. On the basis of nature:
a. Real capital - It is the capital which is used in the production of other goods. For example, capital assets like buildings, machinery, raw materials etc.
b. Money capital - It is the capital which is in the form of money. This capital is used to purchase real capital.
iv. On the basis of durability:
a. Fixed capital - It refers to the capital which is used in the process of production repeatedly.
b. Working capital - It refers to the capital which is used in the process of production only once.
