Capital Expenditure (CAPEX)

Formal

Stands for ‘Capital Expenditure’ Costs of acquiring long term assets that are material and have long term value, eg Motor Cars, Machinery, Land and Buildings Costs of these assets are charged against the profits of a business over a long period of time because of longer use/value.

Real-world Example

A manufacturer spends $2M building a new factory line - that's CAPEX, a long-term investment in the business's productive capacity rather than a day-to-day running cost.