Official Answer Key & Detailed Solution
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Correct Answer: Option (A) — 1 only
Concept & Option Breakdown
Standard Reference VerifiedStatement 1 is correct: Capital Expenditure (CapEx) involves spending on the acquisition or upgrading of long-term productive assets, including machinery, infrastructure, and new technology, which yield multi-year economic benefits.
Statement 2 is incorrect: Debt financing and equity financing are modes of raising funds (capital receipts/financing inflows), not expenditures. Repayment of debt principal is a capital expenditure, whereas raising debt or issuing shares generates capital receipts, not revenue expenditure.
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