What is the expenditure incurred for the establishment of the metro rail line in Delhi called as?
Answer & explanation
Correct answer: option 1
The correct answer is option 1: Capital expenditure.
Capital expenditure refers to the expenditure incurred for acquiring or improving long-term assets such as infrastructure (like metro rail lines), buildings, machinery, etc., which are expected to provide benefits over multiple years. It is distinguished from revenue expenditure, which includes day-to-day operational expenses and maintenance costs.
Expenditure made on the establishment of the metro rail line in Delhi will be a capital expenditure. This is because it leads to creation of an asset.