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Figuring ROI
The Nitty-Gritty
Capital expenditures. Cap-ex. Capital investments. Capital budgeting. And of course, return on investment—ROI. Many companies use these terms loosely or even interchangeably, but they’re usually referring to the same thing; namely, the process of deciding what capital investments to make to improve the value of the company.
ANALYZING CAPITAL EXPENDITURES
Capital expenditures are large projects that require a significant investment of cash. Every organization defines significant differently; some draw the line at $1,000, others at $5,000 or more. Capital expenditures go toward items and projects expected to help generate revenue for more than a year. The category is broad. It includes equipment purchases, business ...
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