Capital Goods
-------------------------------------------------
What is Capital Goods? * Capital goods are the tools and machinaries used for producing consumer products. * They’re (usually) expensive, and they’re purchased for long-term use. * Raw materials are also needed for producing consumer goods (Biscuits, bread etc) but they are not capital goods. * Capital goods are also known as producer goods.
-------------------------------------------------
Examples of Capital goods? * Heavy equipment (such as excavators, forklifts, generators, metal-forming or metal-working machines, vehicles). boilers, storage tanks, evaporators | Chemical factory | Mixer, grinders, refidgerators | Ice-cream factory | Dumpsters, bulldozers etc big vehicles | Construction, mining industry. | * In short, factory equipment are capital goods because they’re used to produce customer goods. * But the equipment used in an office= not capital goods for example stapler, paper shredder, pen-holder, water-cooler table, chair etc. * Similarly, specialized air-conditioners installed in drug/ ice-cream factories to maintain uniform temperature during production= capital goods. * But air-conditioners installed in that factory owner’s cabin=not capitals goods.
-------------------------------------------------
Why is Capital Goods important? * If Capital goods are expensive, then companies cannot buy them=low production= low GDP. * If they buy expensive capital goods, they’ll keep final product’s MRP high to keep the profit margin same. * Hence, Government gives tax reliefs on purchase/import of Capital goods by businessmen. * When you want to import Capital goods from a foreign country (e.g. USA ), you’ll need pay them in their own currency (dollars)? * So where to arrange for the dollars? Recall the FCNR account article Click ME
-------------------------------------------------
What is capital gains? * Capital gains= profit made by selling
What is Capital Goods? * Capital goods are the tools and machinaries used for producing consumer products. * They’re (usually) expensive, and they’re purchased for long-term use. * Raw materials are also needed for producing consumer goods (Biscuits, bread etc) but they are not capital goods. * Capital goods are also known as producer goods.
-------------------------------------------------
Examples of Capital goods? * Heavy equipment (such as excavators, forklifts, generators, metal-forming or metal-working machines, vehicles). boilers, storage tanks, evaporators | Chemical factory | Mixer, grinders, refidgerators | Ice-cream factory | Dumpsters, bulldozers etc big vehicles | Construction, mining industry. | * In short, factory equipment are capital goods because they’re used to produce customer goods. * But the equipment used in an office= not capital goods for example stapler, paper shredder, pen-holder, water-cooler table, chair etc. * Similarly, specialized air-conditioners installed in drug/ ice-cream factories to maintain uniform temperature during production= capital goods. * But air-conditioners installed in that factory owner’s cabin=not capitals goods.
-------------------------------------------------
Why is Capital Goods important? * If Capital goods are expensive, then companies cannot buy them=low production= low GDP. * If they buy expensive capital goods, they’ll keep final product’s MRP high to keep the profit margin same. * Hence, Government gives tax reliefs on purchase/import of Capital goods by businessmen. * When you want to import Capital goods from a foreign country (e.g. USA ), you’ll need pay them in their own currency (dollars)? * So where to arrange for the dollars? Recall the FCNR account article Click ME
-------------------------------------------------
What is capital gains? * Capital gains= profit made by selling