Capital Expenditure s are those expenditures that arises while purchasing fixed assets like lands & buildings, plants & machineries, vehicles, and other large equipments which has long term impact on the profitability of business. It is actually not an expenditure but an investment in fixed assets. Investment i.e. capital expenditures in fixed assets like plant and machineries require large amount of fund therefore the firm must have to carefully analyze the costs and benefits of the capital expenditures before making final decision. Lack of appropriate costs benefits analysis may cause large amount of financial losses.