Question

example of investment expenditure and capital formation

Answer 1

Hi Elis,
You must have heard a lot about investments by Companies. These investments are made with some and the other reasons. A few of the reasons can be purchase of plant, purchase of new machinery, upgradation of technology, etc. Accordingly, such expenditure regarded as 'Investment Expenditure' leads to capital formation of the company. Capital formation in form of new machinery, building, furniture, etc acquired by the business.