Capital expenditures are the funds that a business uses to purchase major physical goods or services to expand the company's abilities to generate profits. These purchases can include hardware (such as printers or computers), vehicles to transport goods, or the purchase or construction of a new building. The type of industry a company is involved in largely determines the nature of its capital expenditures. The asset purchased may be a new asset or something that improves the productive life of a previously purchased asset. If the asset's useful life extends more than a year, then the company must capitalize the expense, using depreciation to spread the cost of the asset over its designated useful life as determined by tax regulations. Capital expenses are most often depreciated over a five- to 10-year period but may be depreciated over more than two decades in the case of real estate.
Read more: What is the difference between CAPEX and OPEX? | Investopedia http://www.investopedia.com/ask/answers/020915/what-difference-between-capex-and-opex.asp#ixzz4FfJzYacx
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