What are the two parts that make up investment in plant, vehicles, buildings, etc?
A) Investment that adds to the stock of assets
B) Annual investment to replace worn out equipment
C) Capitalisation, calculated as a fixed proportion of depreciation over the equipment's lifetime
D) The sum of the cash flows on equipment within the planning horizon

Question

Quizplus · Accepted Answer

Investment in plant, vehicles, buildings, etc is composed of two parts: investment that adds to the stock of assets (such as expansion or new equipment) and annual investment to replace worn-out equipment. Capitalisation and the sum of cash flows on equipment within the planning horizon are not components of investment in plant, vehicles, buildings, etc.

What Are the Two Parts That Make Up Investment in Plant