Question

what is capital cost in own words

what is capital cost and how to minimize it

Answer 1

Capital costs are exenses such as one-time setup cost of a plant or project, after which there will only be recurring operational or running costs. It represents an investment in the business. Capital costs will be recorded as assets on the company's balance sheet rather than as expenses on its income statement.

Examples of capital expenses include the purchase of fixed assets, such as new buildings or business equipment, upgrades to existing facilities, and the acquisition of intangible assets, such as patents.

How to reduce minimize capital expenditures.

1. Be proactive. Stude the market environemnt foresee the changes in industry.

2.Simplify the processes. Businesse must arrage to get the product to market as fast as possible.

3. Go digital. Automate the processes so that valuables time and effort can be utilised in more important areas.

4. Look for options. Before investing in assets conduct a study of available options in the market. Then select the most cost effective one.