The definition of an expenditure is the act of spending money or time and it is something on which you spend money. An example of an expenditure is the money spent on office equipment that you have purchased. The expenditure of time, money, and political capital on this project has been excessive.

Types of Revenue Expenditure

• Direct wages.
• Freight charge.
• Shipping charge.
• Import duty.
• Rent.
• Commission.
• Electricity cost.
• Legal expenses.

Revenue Expenditure is that part of government expenditure that does not result in the creation of assets. Payment of salaries, wages, pensions, subsidies and interest fall in this category as revenue expenditure examples. Also, note that revenue expenses are incurred by the government for its operational needs.

Capital expenditures are typically one-time large purchases of fixed assets that will be used for revenue generation over a longer period. Revenue expenditures are the ongoing operating expenses, which are short-term expenses used to run the daily business operations.

Examples of capital expenditures include the amounts spent to acquire or significantly improve assets such as land, buildings, equipment, furnishings, fixtures, vehicles. The total amount spent on capital expenditures during an accounting year is reported under investment activities on the statement of cash flows.

In general, an expense incurred to increase the revenue-generating capacity or reduce the cost of production can be considered a capital expenditure. They have a quality of permanence and have a useful life or a productive purpose spanning more than one accounting period.

According to the IRS, capital expenditure on a property must have a useful life of more than one year. Investments that only have a temporary effect on a property, such as mowing the grass or cleaning the gutters, are considered maintenance not a capital expenditure.

When companies make a revenue expenditure, the expense provides immediate benefits, rather than long term ones. Examples of revenue expenditure are wages or salaries paid to factory workers, machine Oil to lubricate. Hence option B is not the capital expenditure.

Goodwill once purchased will increase the profits of the company for more than one accounting period. Only the expenditures which does not result in an increase in capacity or in reduction of day to day expenses are not capital expenditure.

Capital expenditures (CAPEX) are a company’s major, long-term expenses while operating expenses (OPEX) are a company’s day-to-day expenses. Examples of OPEX include employee salaries, rent, utilities, property taxes, and cost of goods sold (COGS).

Flexibility is not a feature of an optimal capital structure. An optimal capital structure is the objectively best mix of debt, preferred stock, and common stock that maximizes a company’s market value while minimizing its cost of capital.

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Capital structure can be a mixture of a company’s long-term debt, short-term debt, common stock, and preferred stock. A company’s proportion of short-term debt versus long-term debt is considered when analyzing its capital structure. Debt also allows a company or business to retain ownership, unlike equity.

Factors of production are the inputs needed for the creation of a good or service. The factors of production include land, labor, entrepreneurship, and capital.

They called these the three factors of production: land, labor, and capital.

Factors of production is an economic concept that refers to the inputs needed to produce goods and services. The factors are land, labor, capital, and entrepreneurship. The four factors consist of resources required to create a good or service, which is measured by a country’s gross domestic product (GDP)