Final answer:
Routine repairs and maintenance costs are expensed and not included in PPE as they maintain the asset's current condition. Initial direct costs, capitalized interest, and land improvements are capitalized since they bring future economic benefits and extend the asset's useful life. Fixed costs are related to capital but are only capitalized if they provide future economic benefits.
Step-by-step explanation:
The costs that cannot be included in Property, Plant, and Equipment (PPE) and are expensed instead are routine repairs and maintenance. These costs are considered to be part of the normal upkeep to maintain the asset's present condition and are not capitalized. Initial direct costs, capitalized interest, and land improvements, on the other hand, are typically included in the cost of PPE because they bring future economic benefits, enhancing the asset's value or extending its life.
Investment expenditure includes spending on producer's durable equipment and software, nonresidential structures, changes in inventories, and residential structures. Fixed costs are related to capital and don't change in the short run, regardless of production levels, and can include rent, machinery, research and development costs. These are capital expenditures that can be capitalized if they provide future economic benefits to the business.