In all circumstances, proper attention is to be devoted in analyzing the need for the capital expenditure so that it would be curtailed to the minimum required. Replacement in capital expenditure analysis: Thirdly, replacement need may arise to avoid capital wastage for existing equipment to check its disposal value or it may be obsolescence replacement. Analysis in routine expenditures: In the second type of outlay, routine expenditure may be working condition improvement, maintenance expenditure, competition oriented expenditure etc.ģ. Capital Expenditure analysis in major projects: As regards major projects, strategic investment may be made for expansion of productive capacity or achieving product innovation or preparing barriers against capital fluctuations.Ģ. ![]() With exercise control over capital expenditure in any of the above categories, the capital expenditure analysis should concentrate on three types of outlays viz:ġ.
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