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A fabric store sells material at \$8.00 per yard, but only in whole-yard increments. Each of 3 curtains requires 1.6 yards of fabric, and all the fabric is bought as one continuous piece. What is the total purchase cost?
Total fabric needed: $3 \times 1.6 = 4.8$ yards.
Since fabric is sold only in whole-yard increments, you must purchase $5$ full yards (round up from 4.8).
Total cost $= 5 \times \$8.00 = \mathbf{\$40.00}$.
Which one of the following qualifies as a capital expenditure?
Capital expenditure is spending that improves, extends the life of, or adds value to a long-term asset. Renovating and upgrading a building increases its value and useful life โ this is capital expenditure. The other options are all revenue expenditures: carriage outwards, legal recovery fees, and wage bonuses are period costs that appear on the income statement and do not create lasting assets.
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