What is capital?

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Henrietta O'Leary was a pioneer in the Old West. Her husband died on the journey from Pennsylvania to Colorado. When Henrietta arrived in Denver, she opened a business that sold wheel axles to other pioneers. To set up the business, she borrowed $100 to build a small factory with a store attached to it. She hired two woodworkers and a manager to run the store. Her other primary expenses included the wood used to make the axles, the metal tools woodworkers used in the axle-making process, and a $10 yearly interest payment on the $100 loan.

2.2. Once the business was established, Henrietta was able to let it run itself. She moved to San Francisco and received a $500 check each year representing the profits from her business.

Which of the following are considered by economists to be "capital"?

I. The factory