For a forestry firm, capital could be thought of as which of the following? (i) wages paid to loggers
(ii) sawmill plant and machinery
(iii) the government bonds the company directors have invested in

Question

Quizplus · Accepted Answer

Capital refers to long-term assets that are used in the production of goods and services. In this case, sawmill plant and machinery are the long-term assets essential for forestry activities, and hence, (ii) is the correct choice. Wages paid to loggers are operational expenses, and government bonds the company directors have invested in are not assets owned by the company.

For a Forestry Firm, Capital Could Be Thought of as Which