Which of the following is an example of a capital expenditure?
A) Cleaning the carpet in the front-office room
B) Regular tune-up for a company truck
C) Replacing an engine in a company car
D) Replacing all burned-out light bulbs in the factory

Question

Quizplus · Accepted Answer

A capital expenditure is an investment in a long-term asset that is expected to generate revenue for several years. Replacing an engine in a company car is a capital expenditure because it extends the life of the asset and allows it to continue generating revenue for the company. Choices A, B, and D are all examples of operating expenses, which are costs incurred in the day-to-day operations of a business.

Which of the Following Is an Example of a Capital