Which of the Following Would Not Be Considered a Capital

question 202

Multiple Choice

Which of the following would not be considered a capital expenditure?

• A)The addition of a building wing
• B)A tune-up of a company vehicle
• C)A complete overhaul of an air-conditioning system
• D)The cost of installing a piece of equipment

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Definitions:

Collateral

Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default.

Installment Sales Contract

A sales agreement that allows the buyer to make payments over a period of time in exchange for goods or services.

Amortization Schedule

A table detailing each periodic payment on an amortizing loan (like a mortgage), showing the amount of each payment that goes towards principal and interest over the loan term.

Interest Rate

The amount charged by a lender to a borrower for the use of assets expressed as a percentage of the principal.