When your business buys valuable things such as land, equipment or property, that counts as capital expenditure. What you have purchased becomes known as capital assets if it remains of value for more than a year.
For example…
A mining company will need a very large capital expenditure budget in order to secure the equipment they need to get the job done. A tow truck company is in a similar, but smaller boat. Service providers like writers and graphic designers find they can get their business up and running with much less capital expenditure.
