Which of the following items is part of a firm's financial capital as distinct from its real capital?
A)a new bulldozer
B)a $500 000 balance in a bank account
C)a network of personal computers
D)a fleet of delivery trucks
E)inventory of goods valued at $1 000 000

Question

Quizplus · Accepted Answer

Financial capital refers to the monetary resources (such as cash and investments) that a firm has access to for financing its operations and investments. The $500 000 balance in a bank account is a clear example of financial capital. The other choices - a bulldozer, a network of personal computers, a fleet of delivery trucks, and inventory of goods - are all examples of real capital, which refers to physical assets used in the production of goods or services.

Which of the Following Items Is Part of a Firm's