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    Question

    XYZ Radiology Centre acquired a new imported X-ray machine for Rs.10,50,000. Octroi paid on the machine was Rs. 5,000. Expenses of setting up and starting the machine was Rs. 2,000. The Centre spent Rs. 2,500 on distribution of flyers, advertising the new facility, and Rs. 50,000 on an inaugural ceremony by the District Collector. The amount that can be classified as capital expenditure would be:

    A Rs. 10,59,500 Correct Answer Incorrect Answer
    B Rs. 11,04,500 Correct Answer Incorrect Answer
    C Rs. 10,55,000 Correct Answer Incorrect Answer
    D Rs. 10,57,000 Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    • Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. • CapEx is often used to undertake new projects or investments by a company. Making capital expenditures on fixed assets can include repairing a roof (if the useful life of the roof is extended), purchasing a piece of equipment, or building a new factory. • This type of financial outlay is made by companies to increase the scope of their operations or add some future economic benefit to the operation.

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