True or False: Capital costs are typically associated with short-term investments.

True or False: Capital costs are typically associated with short-term investments.

• A. True
• B. False
• C. Sometimes
• D. It varies

Answer: (B)

Capital costs are generally associated with long-term investments, which makes the statement false. Capital costs encompass significant expenditures needed to acquire, improve, or maintain physical assets such as buildings, stadiums, or equipment. These investments are intended to last for several years, thereby necessitating careful planning and financial analysis. In contrast, short-term investments might refer to operational costs or expenses that support day-to-day functions without the intention of providing long-term benefits. Examples include utility bills, payroll, and regular maintenance that don't contribute to acquiring new assets but are crucial for the ongoing operation of a facility. Therefore, the link between capital costs and long-term investment goals clarifies why the statement is false.

Capital costs are generally associated with long-term investments, which makes the statement false. Capital costs encompass significant expenditures needed to acquire, improve, or maintain physical assets such as buildings, stadiums, or equipment. These investments are intended to last for several years, thereby necessitating careful planning and financial analysis.

In contrast, short-term investments might refer to operational costs or expenses that support day-to-day functions without the intention of providing long-term benefits. Examples include utility bills, payroll, and regular maintenance that don't contribute to acquiring new assets but are crucial for the ongoing operation of a facility. Therefore, the link between capital costs and long-term investment goals clarifies why the statement is false.