What are the most common reasons firms make capital expenditures?

1. Firms make capital expenditures for many reasons, but three are the most common. 2. They expand, they replace or renew fixed assets, and they develop new products. 3. Most manufacturing firms carry a big investment in long-term assets for exactly these reasons. 4. Paying wages and buying supplies are short-term expenses supporting current production, so they never qualify as capital expenditure. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.2 How Organizations Use Funds_