CAPEX (Capital Expenditure)

Capital Expenditure (CAPEX) is the money spent by a business to acquire, maintain, and upgrade assets in order to generate long-term value. CAPEX often refers to larger purchases made to support operations or establish new ones, such as buying real estate, plant, equipment, vehicles, and technology. It is also used to fund development projects, such as research on new products and services or launching an advertising campaign. The goal of CAPEX is to create value for shareholders over the lifetime of an asset, with returns coming from increased efficiency, cost savings, or revenue growth. In general, the more capital expenditure that is put into an asset, the higher its expected return should be.