Understanding Strategic Capital Expenditure Decisions
Strategic capital expenditure decisions involve acquiring additional equity or finance to fund long-term investments that have a significant impact on a business, such as purchasing new assets like fishing boats, trucks, or machinery. These decisions are distinct from routine expenses like repairs and maintenance.
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HomeButton.png What is a strategic capital expenditure decision A strategic capital expenditure decision requires a business to raise additional equity or finance to fund the capital expenditure.
HomeButton.png The capital expenditure is relevant to the business & the decision has a medium to long-term impact.
HomeButton.png Examples are; a second cray fishing boat, a new logging truck, a labelling machine on a kiwifruit grader, purchase of more land.
HomeButton.png It is not routine expenditure such as more cray pots, repairs & maintenance of a truck.
