UPS is working with the New York State Energy Research and Development Corporation to develop new technology that will enable it to convert diesel fuel delivery trucks into electric fuel trucks. UPS hopes to have a working model of its converted delivery truck ready in 2018. The plan is to convert 1,500 delivery vehicles, representing 66% of the company's fleet in New York City, by 2022.

UPS wants to convert its fleet to all-electric, as electric-fuel trucks eliminate harmful emissions, noise, and dependency on fossil fuels. UPS drivers will drive the electric trucks during the day and charge them at night.

Questions

What is the difference between capitalizing an expense and spending it?

What information do you need so you can determine if UPS should capitalize on or spend the cost of converting trucks to all-electric?

Do you think UPS will capitalize or add to the cost of switching to electric vehicles?

Answer rating: 100% (QA)

The difference between capitalizing an expense and spending it lies in how the cost is treated on a companys financial statements Capitalizing an expe... View the full answer