To determine the capital expenditure for Eko Local Government, we need to identify which of the listed expenditures qualify as capital expenditures. Capital expenditures (CapEx) are funds used by an organization to acquire, upgrade, and maintain physical assets such as property, buildings, technology, and equipment. These expenditures are typically long-term investments that will benefit the organization for more than one accounting period. Breakdown of Expenditures

1. Hospital Building - N200,000
2. This is a capital expenditure because it involves the construction of a physical asset (the hospital building) that will provide long-term benefits.
3. Drugs - N180,000
4. This is not a capital expenditure. Drugs are considered operational expenses (OpEx) because they are consumed within a short period and do not provide long-term benefits.
5. Hospital Beds and Mattresses - N40,000
6. This is a capital expenditure. Hospital beds and mattresses are physical assets that will be used over several years, thus qualifying as a long-term investment.
7. Doctors' and Nurses' Salaries - N120,000
8. This is not a capital expenditure. Salaries are operational expenses as they are incurred regularly and do not contribute to the acquisition of long-term assets.
9. Administrative Expenses - N50,000
10. This is also not a capital expenditure. Administrative expenses are ongoing costs necessary for the day-to-day functioning of the organization and do not result in the acquisition of long-term assets.

Calculation of Capital Expenditure Now, we will sum up the capital expenditures identified:

• Hospital Building: N200,000
• Hospital Beds and Mattresses: N40,000

Total Capital Expenditure = N200,000 + N40,000 = N240,000 Conclusion The correct option for the total capital expenditure is C. N240,000. Explanation of Other Options

• Option A: N420,000
• This option incorrectly includes all expenditures, including operational expenses like drugs, salaries, and administrative expenses, which do not qualify as capital expenditures.
• Option B: N380,000
• This option likely includes the hospital building and beds but incorrectly adds operational expenses, leading to an inflated total.
• Option D: N200,000
• This option only considers the hospital building and ignores the hospital beds and mattresses, which are also capital expenditures.

Summary of Key Points

• Capital expenditures are long-term investments in physical assets.
• Only the hospital building and hospital beds/mattresses qualify as capital expenditures in this scenario.
• Total capital expenditure is calculated as N200,000 (building) + N40,000 (beds) = N240,000.
• Operational expenses, such as drugs, salaries, and administrative costs, do not contribute to capital expenditure totals.

This thorough understanding of capital versus operational expenditures is crucial for financial accounting and will aid in making informed decisions regarding budgeting and financial reporting.