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Which of the following is considered a capital expense?

  • 1
  • 2
    Payment of salaries  
  • 3
  • 4
    Construction of school buildings
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Answer : 4. "Construction of school buildings"
Explanation :

1. Capital expenditure is money spent by the government on the development of machinery, equipment, buildings, health facilities, education etc.

2. It also includes expenditure by the government on the acquisition of fixed assets like land and investments which give future profits or dividends.

3. Creation of assets as well as repayment of loans is also capital expenditure, as it reduces liability.

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