*noun*; one of the factors of production. Fixed capital refers to physical objects used to produce goods or services. Examples include
cash registers, drill presses or
car jacks, and civil aircraft.
Pretty much anything can be used as fixed capital, provided it is used by the entrepreneur/firm to provide a service or produce
something valuable. If the firm is a hotel, then pillows and vacuum cleaners are fixed capital; if it's a store, then the cash register, the shelves, and the
mop are fixed capital.
Another form of business capital is circulating capital. This is called capital because it's a physical object used to produce value, but its purpose is to be sold or used up in production.
Some part of the capital of every
master artificer or manufacturer must be fixed in the instruments of his
trade...In other works a much greater fixed capital is required. In a great iron-
work, for example, the furnace for melting the ore, the forge, the slitt-mill, are instruments of trade which cannot be erected without a very great expense.
Adam Smith, *The Wealth of Nations* (1776)