The basic motives for capital expenditures are to expand, replace, or renew fixed assets or to obtain some other, less tangible benefit over a long period.

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Capital expenditures are investments made by a company to acquire, improve, or maintain fixed assets such as property, plant, and equipment, or to invest in other long-term benefits such as research and development or brand building. These expenditures can be made for a variety of reasons, including expanding production capacity, improving efficiency, or enhancing the quality of products or services offered. In general, capital expenditures are intended to provide a long-term benefit to the company and are distinguished from day-to-day expenses that are necessary to keep the business running.

The Basic Motives for Capital Expenditures Are to Expand, Replace