Capital cost

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Capital cost

Capital costs are costs incurred on the purchase of land

Real property

In the common law, real property refers to one of the two main classes of property, the other class being personal property . Real property generally encompasses Estate in land, land improvements resulting from human effort including buildings and machinery sited on land, and various property rights over the preceding....
, building

Building

In architecture, construction, engineering and Real estate developer the word building may refer to one of the following:# Any man-made structure used or intended for supporting or sheltering any use or continuous occupancy, or...
s, construction

Construction

In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of multitasking....
and equipment to be used in the production of goods

Good (economics and accounting)

In economics, a good is any object or service that increases utility, directly or indirectly. It should not to be confused with the adjective "good", as used in a moral or ethics sense....
or the rendering of services. In other words, the total cost needed to bring a project to a commercially operable status. However, capital costs are not limited to the initial construction of a factory

Factory

A factory or manufacturing plant is an industry building where workers manufacturing Good or supervise machines Process Manufacturing one product into another....
or other business. For example, the purchase of a new machine

Machine

A machine is any device that uses energy to perform some activity. In common usage, the meaning is that of a device having parts that perform or assist in performing any type of work....
that will increase production and last for years is a capital cost.

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Encyclopedia

Capital costs are costs incurred on the purchase of land

Real property

Building

Construction

Good (economics and accounting)

Factory

Machine

Operating cost

operating cost are the recurring expense which are related to the operation of a business, or to the operation of a device, component, piece of equipment or facility....
s, capital costs are one-time expenses, although payment may be spread out over many years in financial reports and tax returns. Capital costs are fixed and are therefore independent of the level of output.

A fossil fuel power plant

Fossil fuel power plant

A fossil-fuel power plant is a power stations that burns fossil fuels such as coal, natural gas or petroleum to produce electricity.Fossil-fuel power plants are designed on a large scale for continuous operation....
's capital costs include the purchase of the land the plant is built on, permitting and legal costs, the equipment needed to run the plant, the cost of the plant's construction, the cost of financing and the cost of commissioning the plant incurred prior to commercial operation of the plant. They do not include the cost of the natural gas

Natural gas

Natural gas is a gas consisting primarily of methane. It is found associated with fossil fuels, in coal beds, as methane clathrates, and is created by methanogenic organisms in marshes, bogs, and landfills....
, fuel oil

Fuel oil

Fuel oil is a fractional distillation obtained from petroleum distillation, either as a distillate or a residue. Broadly speaking, fuel oil is any liquid petroleum product that is burned in a furnace or boiler for the generation of heat or used in an engine for the generation of power, except oils having a flash point of approximately and oi...
or coal

Coal

Coal is a readily combustion black or brownish-black sedimentary rock. The harder forms, such as anthracite, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure....
used to fire the plant once the plant enters commercial operation or any tax

Tax

To tax is to impose a financial charge or other levy upon an individual or Legal person by a state or the functional equivalent of a state.Taxes are also imposed by many subnational entity....
es on the electricity

Electricity

Electricity is a general term that encompasses a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena such as lightning and static electricity, but in addition, less familiar concepts such as the electromagnetic field and electromagnetic induction....
that is produced. They also do not include the labor used to run the plant or the labor and supplies needed for maintenance

Maintenance, Repair and Operations

Maintenance, repair and operations is fixing any sort of machine or electrical machine should it become out of order or broken as well as performing the routine actions which keep the device in working order or prevent trouble from arising ....
.

Government generally provides subsidies through investment

Investment

Investment or investing is a term with several closely-related meanings in business management, finance and economics, related to Saving or deferring Consumption ....
s and partnership

Partnership

A partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested....
s in the initial capital costs of research

Research

Research is defined as human activity based on intellectual application in the investigation of matter. The primary purpose for applied research is discovery , interpretation , and the development of methods and systems for the advancement of human knowledge on a wide variety of scientific matters of our world and the universe....
and manufacturing infrastructure that cannot be matched by investor owned companies.

Capital cost

See also