How often do capital expenditures typically occur?

Capital expenditures, often referred to as CapEx, are significant investments made by a company to acquire or upgrade physical assets such as property, buildings, equipment, or technology. These expenditures are not routine expenses; rather, they are made infrequently based on the strategic needs of the business and typically revolve around substantial projects that require significant financial outlay.

The nature of capital expenditures means they tend to occur over a longer timeframe, often ranging from every 5 to 20 years. This cycle allows businesses to save for these large expenses and plan for necessary upgrades or expansions. For example, a company may decide to invest in a new building, renovate an existing property, or buy new machinery only after careful planning and consideration of the future needs of the business.

In contrast, daily, monthly, or yearly intervals typically pertain to operating expenses, which are necessary for the day-to-day functioning of a business and occur much more frequently. Understanding this distinction helps clarify why the correct answer focuses on the longer intervals associated with capital expenditures.