CAPEX, or Capital Expenditure, refers to the funds used by a company to acquire, upgrade, and maintain physical assets. This could include property, buildings, an industrial plant, technology, or equipment. CAPEX is often used to undertake new projects or investments, allowing a company to sustain and improve its operations. These expenses are considered investments and are not deducted from revenue in the short term, but are instead depreciated or amortized over the life of the asset. Examples of CAPEX could include the purchase of a new factory, upgrading machinery, or investing in a new software system.
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