contestada

Pat's pets recently paid? $15,000 to have the engine in its delivery van overhauled. the estimated useful life of the van was originally estimated to be 4 years. the overhaul is expected to extend the useful life of the van to 10 years. the overhaul is regarded as? a(n):

Respuesta :

LearnGrow
The overhaul is regarded as a capital expenditure (CAPEX) . CAPEX is the money a company spends to buy, maintain, or improve its fixed assets. Fixed assets are building, vehicles, land, equipment. So, in Pat's case, buying the overhaul will extend the useful life of the van, so it is a CAPEX.
Pat will upgrade his productive assets (vehicle:van) in order to increase the capacity or efficiency.