Which of the following expenditures is classified as a capital expense?

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Payments made to Directors as compensation upon ending their tenureCosts related to renewing a Trade Mark registrationGratuity payments made to Directors when their services endInstallment royalties paid for acquiring rights to produce and market patented drugsNone of the above

Explanation

Option A is a capital expenditure because compensation paid to Directors upon termination is considered a one-time, non-recurring cost that benefits the company over time. In contrast, expenses like Trade Mark renewal (B) and gratuities paid to Directors (C) are typically treated as revenue expenditures. Royalty payments (D), although paid in installments, are generally operational costs related to production rights.