Capital Project

What is a 'Capital Project'

A capital project is a long-term investment made in order to build upon, add or improve on a capital-intensive project. A capital project is any undertaking which requires the use of notable amounts of capital, both financial and labor, to undertake and complete. Capital projects are often defined by their large scale and large cost relative to other investments requiring less planning and resources.

BREAKING DOWN 'Capital Project'

Infrastructure projects such as roads, railways and dams are the most common examples of capital projects in the public sphere. Capital projects are also common in the corporate world as well, as firms will allocate large sums of resources in order to build upon or maintain capital assets, such as machinery or a new mining project. In both cases, capital projects are typically planned and debated for a long period to determine the most efficient and resourceful method of completion.

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RELATED FAQS
  1. How do you use the profitability index rule when scoping out a project?

    Understand the parameters of the profitability index rule and how this rule is used in corporate capital allocation to determine ... Read Answer >>
  2. How do you use internal rate of return to calculate a capital budget?

    Learn about how the internal rate of return is used in the creation of a capital budget along with net present value and ... Read Answer >>
  3. How do companies calculate the estimated duration of a new project?

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  4. How much debt is too much when calculating capital budgeting?

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  6. Why is a bank guarantee important in a long-term project contract?

    Understand what a bank guarantee is and learn why it is so important to the risk and safety of a long-term project contract Read Answer >>
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