Which of the Following Items Would Be Considered as Capital

question 2

Multiple Choice

Which of the following items would be considered as capital expenditure?

• A)Power used during the current month
• B)Purchase cost of property,plant or equipment
• C)Minor repairs to a 2-year-old vehicle
• D)Regular 6-monthly oil changes on a vehicle

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Definitions:

9% Bond

A bond that pays an annual interest rate of 9% to its holder.

Current Yield

The annual income (interest or dividends) divided by the current price of the security, often used to measure the return on investment for bonds.

8 ½% Bond

A bond that pays an annual interest rate of 8.5% to its holders.

Yield to Maturity

The total return expected on a bond if held until it matures, considering both interest payments and the capital gain or loss.