Physical Capital 2020-03-01 08:00:00

Physical Capital

Physical capital is one of the three factors of production used in the production of goods. Physical capital is used to make goods and is also reusable. This is in contrast to raw goods, which become part of the final product and are not reusable. The three factors of production include land/natural resources/real estate, human capital, and physical capital.

Physical capital falls under the category of capital expense. It includes equipment, computers, and machines. Most physical capital is paid for over several years and can be depreciated annually.

 


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