Elements of a capital investment decision, such as the estimated cost of a project, phasing of expenditure, duration (life) of investment, risks involved, expected returns and their timing, interest rates, taxation rates, capital allowances, and competitive, economic, and regulatory environment.
Comparison of the sums to be invested in a project with the earnings expected over the period of the investment, expressed usually as return-on-investment (ROI) percentage per accounting period.
Money invested in a business venture with an expectation of income, and recovered through earnings generated by the business over several years. It is generally understood to be used for capital expenditure rather than for day-to-day operations (working capital) or other expenses.
Measure of a firm's efficiency in deployment of its assets, computed as a ratio of the total value of assets to sales revenue generated over a given period. Capital intensity indicates how much money is invested to produce one dollar of sales revenue. Formula: Total assets ÷ Sales revenue.
Addition or structure that enhances the value of a property, or a replacement or upgrade that extends the useful life of an asset.
Profit made on an investment or purchase of an asset, measured by the increase in its market value over the invested amount or cost price. Also called capital appreciation.
Heavy equipment (such as excavators, forklifts, generators, metal-forming or metal-working machines, vehicles) which (in contrast to consumer goods) require a relatively large investment, and are bought to be used over several years. Also called producer goods.
Tax payable on profit made on the sale (disposal) of a capital asset, assessed and levied differently from tax on profit (income tax) realized from sale of goods or services in the normal course of a business. Often, profits on capital assets held for 12 months or longer are taxed at a favorable ...
