Slides in this set

Slide 1

Preview of page 1

Decisions…read more

Slide 2

Preview of page 2

Capital v Revenue Expenditure
Capital Revenue
Cash spent on Cash spent on day-to-
investment in the day operations: e.g.
business: e.g.
Raw materials
Plant & machinery Energy costs
Factory buildings Wages and salaries
IT systems Marketing costs
Distribution equipment Office administration
Fixtures and fittings…read more

Slide 3

Preview of page 3

Capital expenditure = long-term
The main distinction is that capital
expenditure is on non-current
assets which have an "economic
life" in the business ­ they are
intended to be kept, rather than
sold or turned into products…read more

Slide 4

Preview of page 4

Many reasons for capital expenditure
· To add extra production capacity
· To replace worn-out, broken or
obsolete machinery and equipment
· To support the introduction of new
products and production processes
· To implement improved IT systems
· To comply with changing legislation &
regulations…read more

Slide 5

Preview of page 5

The implication of scarce finance
The Problem Choices have to be
Finance in Which investments
nearly every justify the risks?
business is How to choose
between competing
scarce investments?…read more

Slide 6

Preview of page 6

What is investment appraisal?
The process of
analysing whether
investment projects
are worthwhile…read more

Slide 7

Preview of page 7
Preview of page 7

Slide 8

Preview of page 8
Preview of page 8

Slide 9

Preview of page 9
Preview of page 9

Slide 10

Preview of page 10
Preview of page 10


No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »