Glossary
Capital Investments
Capital investments are funds used by a business or individual to acquire, upgrade, or maintain physical assets such as property, equipment, or infrastructure. These investments are made with the goal of improving productivity, expanding operations, or generating long-term growth.
What are examples of capital investments?
Common examples include buying machinery, building new facilities, upgrading technology systems, or purchasing vehicles used in business operations.
How are capital investments different from operating expenses?
Capital investments are long-term expenditures for assets that provide future value, while operating expenses are short-term costs required for daily operations.
Why are capital investments important?
They help businesses grow, improve efficiency, increase revenue, and stay competitive in the market over the long term.
How are capital investments financed?
Companies may use retained earnings, bank loans, bond issuance, or equity financing to fund capital investments.
Do individuals make capital investments?
Yes, though less commonly. Individuals might invest in real estate, a small business, or equipment for a personal venture with the expectation of long-term returns.
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