Final answer:
Types of expenditures after asset acquisition include additions, rearrangements, repairs and maintenance, and improvements. These are crucial for maintaining or enhancing the asset's value and productive capacity.
Step-by-step explanation:
After the initial acquisition of an asset, various types of expenditures can occur that may enhance its value, extend its life, or adapt it to different uses. These expenditures can be categorized as follows:
Additions - This represents the expansion of the existing capacity of the asset, such as adding a new wing to a building or an extension to existing machinery.
Rearrangements - This involves reorganizing or relocating an asset, which may result in better efficiency or productivity but does not necessarily increase the value of the asset.
Repairs and maintenance - Regular upkeep to maintain the asset in its current condition and to prevent degradation over time.
Improvements - Refers to making improvements that increase the productive capacity, prolong the useful life, or upgrade the quality of the asset.
These expenditures are essential not only for maintaining the asset but also for ensuring that it continues to contribute to the productive capacity of a business or a household, thereby impacting investment expenditure.