Question

the purchase of a new motor that will increase the useful life of a vehicle by five years should be treated as:

Answer 1

The purchase of a new motor that will increase the useful life of a vehicle by five years should be treated as capital expenditure.

Capital expenditures (CapEx) are price range used by a organization to gather, upgrade, and preserve bodily property including belongings, vegetation, homes, generation, or gadget. CapEx is often used to undertake new initiatives or investments with the aid of a organisation.

Capital expenditure or capital rate is the cash an corporation or corporate entity spends to shop for, hold, or enhance its constant belongings, including buildings, motors, equipment, or land.

Capital expenditures (CapEx) are finances used to collect, upgrade, or preserve capital assets. Capital expenses are pondered within the cash glide assertion, and may be calculated with the aid of adding contemporary depreciation with the trade in plant, belongings, and equipment (PP&E) from the preceding accounting cycle.

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