What are the Challenges Associated with Capital Expenditure?
Entrepreneurs may face several challenges when dealing with capital expenditure:
1. High Initial Costs: Capital expenditures often require significant upfront investment, which can strain the financial resources of a new or small business. 2. Risk of Obsolescence: Technology and equipment can become outdated quickly. Entrepreneurs need to consider the risk of obsolescence and invest in assets that will remain relevant in the long term. 3. Cash Flow Management: Large capital expenditures can impact cash flow, making it essential to balance investment with the day-to-day operational needs of the business.