Capital Expenditure Includes Acquisition and Preparation Costs Steps:

• Identify the purchase price of the machine: $32,000.
• Add delivery charges to bring the asset to the location: $1,800.
• Add installation wages to prepare the asset for use: $1,300.
• Exclude insurance as it is an operating expense, not part of initial capitalization.
• Sum the included costs: $32,000 +$1,800 + $1,300 =$35,100.

Why C is correct:

• It totals the costs directly attributable to acquiring and making the machine ready for operation, as defined by accounting standards like IAS 16 or GAAP for property, plant, and equipment.

Why the others are wrong:

• A: Omits delivery and installation, understating the full capital cost.
• B: Includes only purchase and partial delivery, ignoring installation.
• D: Incorrectly adds insurance, which is expensed rather than capitalized.

Final answer: C