Which of the following is considered a capital expense?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Construction of school buildings
- Construction of school buildings is considered a capital expense.
- A capital expenditure (CapEx) is the money companies use to purchase, upgrade, or extend the life of an asset.
- The types of capital expenditures can include purchases of property, equipment, land, computers, furniture, and software.
- CapEx can be a one-time expenditure (i.e. buying land) or accumulated over time as part of a project (i.e. developing a building on that land).