Capital expenditures (Capex)

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Definition: Capital expenditures (Capex)

Capital expenditures (Capex) are the monetary expenditure to acquire/upgrade an asset for the business purpose for a long or a permanent period of time. This one time expenditure is amortized over the life of the asset. Such expenditures are undertaken only when the income generated from these assets is huge in comparison to the capex they require.

Typical examples of such assets can be-

  1. An infrastructure facility such as a machine or building for factory purpose.
  2. Intangible assets such as copyrights, trademarks.
  3. Development/Renovation of a facility for future purposes.

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