Correct Answer: (C) Creditors

Explanation of the correct option:
Fixed capital is required for acquiring long-term assets such as land, buildings, plant, and machinery. Therefore, the sources of fixed capital are generally long-term sources of finance. Issue of shares, issue of debentures, and loans from financial institutions like IFCI are all long-term sources and are commonly used to raise fixed capital.

Creditors, on the other hand, provide short-term finance in the form of trade credit for purchasing raw materials or meeting day-to-day expenses. Since creditors are related to working capital, they are not a source of fixed capital.

Explanation of incorrect options:
(A) Issue of debentures — This is incorrect because debentures are long-term borrowings and are an important source of fixed capital. Companies use debentures to raise funds for acquiring fixed assets and long-term business expansion.

(B) Issue of shares — This is incorrect because share capital is a permanent source of finance and is widely used for acquiring fixed assets such as land, buildings, and machinery. Therefore, it is a source of fixed capital.

(D) Loan from IFCI — This is incorrect because loans from IFCI (Industrial Finance Corporation of India) are long-term loans provided for financing fixed assets and industrial development. Hence, they are a source of fixed capital.

Conclusion:
Thus, creditors provide only short-term finance for day-to-day business operations and working capital needs, not for acquiring fixed assets. Therefore, the correct answer is (C) Creditors.

The source of fixed capital is not

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