Define “capital expenditure” (CapEx).

The definition of "capital expenditure" (CapEx) pertains specifically to funds that are utilized to acquire or upgrade physical assets such as property, buildings, machinery, and equipment. This type of expenditure is significant because it often involves large contributions of resources toward long-term investments, thereby enhancing the company's productive capacity or extending the useful life of its assets.

CapEx is essential for an organization to grow and maintain operational efficiency, as these investments can lead to improvements in production capabilities or the introduction of new technology and infrastructure. This long-term focus distinguishes capital expenditures from other types of expenditures, which are typically short-term in nature and related to daily operational costs.