3 A B C D E F G H I J K L M N O P Q R S T U V W Y

Capital Purchases

Capital Purchases are investments in production plants, equipment, buildings, and other fixed assets. These assets are intended to raise the revenue-earning capacity of a company. A capital purchase can be paid for from cash reserves and/or by borrowing money. Either way, accountancy procedures will help show the value of the asset, and its annual cost to the business, spread over its useful life. See also Capital Expenditure.