This economics question tests your understanding of economic models and analysis. The step-by-step answer below applies the relevant framework and explains the reasoning.
From the table what are the examples of capital expenditure
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Answer
purchase of machinery, purchase of building, purchase of vehicles
Step 1: Capital expenditure is money spent to buy, maintain, or improve fixed assets, such as property, plant, or equipment, providing benefits over multiple accounting periods.
Step 2: From the table (typical examples distinguishing capital vs revenue expenditure), identify items that qualify as capital expenditure. These include long-term asset acquisitions like:
- Purchase of machinery
- Purchase of building/land
- Installation of plant
- Purchase of vehicles
(Revenue expenditures like rent, repairs, salaries are excluded.)
Examples of capital expenditure: purchase of machinery, purchase of building, purchase of vehicles.
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Capital expenditure is money spent to buy, maintain, or improve fixed assets, such as property, plant, or equipment, providing benefits over multiple accounting periods.