Capital value
Capital is regarded as one of the ‘factors of production’ along with land and labour. These are the elements that are usually required by business. For more information see: Capital.
Capital value is the price that would have been paid for a given asset or group of assets if they had been purchased at the time of their evaluation. So, it does not matter how much was paid for an asset 10 years ago, its’ capital value is bound up with how much would be paid for it today. In other words, capital value is equivalent to market value.
Determining the capital value of an asset depends on the nature of the asset. Homes and cars can involve complex variables and determining their capital values may require specialist appraisers. In contrast, determining the capital value of assets such as stocks and shares can be achieved easily by looking at the current stock market price and the number of units or shares held.
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