What is a capital expenditure?

A capital expenditure refers to funds spent by an organization to acquire, upgrade, or maintain physical assets such as property, plants, buildings, or equipment. These expenditures are typically long-term investments that provide benefits and utility over time, often leading to increased efficiency or capacity within the organization.

In this context, the correct option highlights that capital expenditures include purchases that directly contribute to the operational capabilities of a healthcare facility, such as land, buildings, and equipment. These items are essential for delivering healthcare services, and their costs are capitalized on the balance sheet rather than expensed immediately, reflecting their lasting value to the organization.

The other options pertain to operational costs or expenses incurred in the daily running of healthcare services. These include costs for salaries and medications—expenses that are necessary for ongoing operations but do not result in the acquisition of long-term assets. Therefore, while they are critical to the functioning of a healthcare facility, they do not fall under the definition of capital expenditures.