Businesses often face the need to spend large amounts of money on assets that will be functional for many years. Here are a few examples:…

Investment in fixed assets is generally undertaken because of the need to produce and sell goods or services in the future. It is a commitment…

Capital expenditure is an expenditure on long-lived assets, also referred to as fixed assets or non-current physical assets. The term capital investment is sometimes used…

Capital expenditure generally brings in changes in the cost pattern of a product or service. If the capital expenditure is to replace an asset with…

Cash receipts and cash disbursements are referred to as cash flows. The cash receipts are cash inflows and the cash disbursements are cash outflows. Capital…

A series of activities takes place before a fixed asset is acquired and brought to a state ready for use. For example, one might think…

The total cash inflows over the life of the project should exceed all of the cash outflows. The cash flows take place over a specific…

There are a number of capital budgeting models available that assess and rank capital expenditure proposals. Let’s take a look at four of the most…

Capital expenditure relates to an investment project for long-lived assets. The appropriate capital expenditure on a project should include all costs, such as planning fees,…