Capital Expenditure

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Capital expenditure, abbreviated as CAPEX, is any funds used by a company to upgrade or acquire physical assets, including equipment and industrial buildings. It is used to take on new projects or investments in the enterprise. Capital expenditure can also be used by firms to either increase or maintain their scope of operations. In accounting, an expense becomes a capital expenditure when the investment or asset in question is set to improve or improves the life of an existing capital asset.