COST ACCOUNTING
CAPITAL BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following expenditures is not considered a capital investment?
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Building construction costs
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Cost of buying a new machine
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Research and Development Costs
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Machine installation costs
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Explanation:
Detailed explanation-1: -Examples of revenue expenditure are wages or salaries paid to factory workers, machine Oil to lubricate. Hence option B is not the capital expenditure.
Detailed explanation-2: -Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company.
Detailed explanation-3: -Research and development expenses are designed to generate future growth and should be treated as capital expenditures.
There is 1 question to complete.