What's the difference between growth CapEx and maintenance CapEx?

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IBPrep · Accepted Answer

Maintenance CapEx is spending required to maintain the existing asset base and current revenue level, replacing worn-out equipment, refreshing IT, etc. Growth CapEx is incremental spending to expand capacity, enter new markets, or build new product lines that drive future revenue growth. Maintenance CapEx is roughly equal to depreciation in a steady state; growth CapEx is anything above that.

What's the difference between growth CapEx and maintenance CapEx?

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