Fundamentals of Engineering Economics 3rd Edition by Chan Park

Exercise 1

Identify which of the following expenditures is considered as a capital expenditure that must be capitalized (depreciated):
(a) Purchase land to build a warehouse at $300,000.
(b) Purchased a copy machine at $15,000.
(c) Installed a conveyor system at a cost of $55,000 to automate some part of production processes.
(d) Painted the office building, both interior and exterior, at a cost of $22,000.
(e) Repaved the parking lot at a cost of $25,000.
(f) Installed a purified water fountain in the employee lounge at a cost of $3,000.
(g) Purchased a spare part for a stamping machine at a cost of $3,800.
(h) Paid $12,000 to lease a dump truck for six months.
(i) Purchased a patent on an energy-saving device over five years at a cost of $30,000.