Indicate Whether Each of the Following Items Normally Would Be

question 2

Essay

Indicate whether each of the following items normally would be considered a capital expenditure (C) or a revenue expenditure (R).
_____ 1. Oil change for company vehicle
_____ 2. Replacement of a few roof shingles
_____ 3. Cost to overhaul the heating system
_____ 4. Battery replacement for company vehicle
_____ 5. Painting factory walls
_____ 6. Installation of expensive paneling in executive offices

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Cash Flows

The total amount of money being transferred into and out of a business, particularly in terms of operational, investment, and financing activities.