Question

Nicholas starts a taxi cab business. He buys a garage, hires three drivers, buys two taxi-cabs, he sends his cab drivers to driving school for better driving skills and road knowledge, and advertises in the local newspaper. What action(s) represents CAPITAL investment?

the purchased taxi cabs

the purchased garage

the taxi cab driver training

the newspaper ad

the taxi drivers

Answer 1

Answer: The purchased of taxi cabs

Answer 2

Option A and B. The actions that represent capital investments are the purchased taxi cabs and the purchased garage.

Step-by-step explanation:

One of the definitions of Capital investment is a company's acquisition of long-term assets that will help the company to run efficiently and to grow faster. This long-term acquisitions can be in the form of real-estate, machinery or manufacturing plants, this is to say that they are physical assets. When Nicholas started his taxi cab business and he purchased taxi cabs and a garage, he was using capital investment, as these two assets are physical and are also long-term acquisitions that will help the business to grow and to operate successfully.