Arnold opens a cake decorating company. He purchases decorating tools and ingredients. These are both examples of which Capital Expenditure.
Capital Expenditure is money that a company uses to acquire, upgrade, and maintain physical assets such as real estate, factories, buildings, technology, or equipment. It is often used for new projects or company investments.
• Capital expenditures on assets, plants, and equipment may include roof repairs, equipment purchases, or new plant construction.
• These types of financial expenditures are used by businesses to expand their operations or add economic benefits to their operations.
Hence it can be concluded that both examples are capital types of expenditure.
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