Classification of fund outlays by the firm into operational and Capital expenditures. Introduction: The capital expenditures are the money spend by the firms to improve, maintain or acquire the assets of the firm which helps to improve the output of the firm. The firm has a benefit period of more than one year from the capital expenditures. Operating expenditures are the money spend by the firms to meet its operational cash requirements such as providing the rent for the buildings, wages for the employees etc.

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Chapter 11, Problem 11.1P

Summary Introduction

To determine:

Classification of fund outlays by the firm into operational and Capital expenditures.

Introduction:

The capital expenditures are the money spend by the firms to improve, maintain or acquire the assets of the firm which helps to improve the output of the firm. The firm has a benefit period of more than one year from the capital expenditures.

Operating expenditures are the money spend by the firms to meet its operational cash requirements such as providing the rent for the buildings, wages for the employees etc.

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