A $60,000 outlay for a new machine with a usable life of 15 years is called
A) capital expenditure.
B) operating expenditure.
C) replacement expenditure.
D) none of the above.

Question

Quizplus · Accepted Answer

A $60,000 outlay for a new machine with a usable life of 15 years is a capital expenditure because it is a long-term investment in a fixed asset that will benefit the company's operations over a significant period of time. It is not an operating expenditure because it is not a day-to-day expense, and it is not a replacement expenditure because it is not replacing an existing asset.

A $60,000 Outlay for a New Machine with a Usable