Capital Expenditure

Capital Expenditure (CapEx) refers to funds used by a company to acquire, upgrade, and maintain physical Assets such as property, buildings, technology, and equipment. These expenditures are made to enhance the productive capacity of the business and are typically considered long-term investments. CapEx is distinct from Operating Expenses (OpEx), which are the costs incurred in the day-to-day functioning of the business.

Examples of Capital Expenditure:

• Purchasing new machinery to increase production capacity.
• Renovating a commercial building to improve workSPACe efficiency.
• Acquiring a new vehicle fleet for logistics and transportation.
• Investing in advanced technology systems to enhance operational efficiency.

Cases:

• A manufacturing company invests $500,000 in new automated production lines to reduce labor costs and improve output quality.
• A retail chain spends $2 million to build a new store location, expecting it to generate significant Revenue over the long term.
• A tech startup allocates $100,000 for server Infrastructure to support its growing online platform.
• A hospital invests $1 million in advanced medical equipment to provide better patient care and attract more cLients.