Describe capital expenditures
Describe briefly the term capital expenditures?
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Capital Expenditure is an amount acquired for acquiring the long term assets like land, equipments, building that are continually employed for the reason of earning revenue. Such are not intended for sale. Such costs are recorded in account that is Property, Plant, and Equipment. Profits from this expenditure are spread on numerous accounting years.
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Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax 40% Firm is proposing to buy the new plant that could generate extra annual profit of Rs. 10,000. The fixed cost of new plant is expected to Rs. 4000. New plant would increase sales volume by Rs. 40,00
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