Cisco Customer Success Manager (DTCSM) — Question 68

How are operating expenses (OpEx) different from capital expenses (CapEx)?

Answer options

• A. OpEx are investments a company pays for up-front, while CapEx are the on-going costs to run a business.
• B. OpEx includes software licenses with contracts that have user rights in perpetuity, while CapEx includes software services that are easily reconfigured.
• C. OpEx is expenses for the day-to-day operation of a business, while CapEx is investments in assets.
• D. OpEx has depreciation, while there is no deprecation with CapEx.

Correct answer: C

Explanation

The correct answer, C, accurately describes OpEx as the costs associated with the regular operations of a business and CapEx as funds used to acquire or upgrade physical assets. Option A incorrectly reverses the definitions, B mischaracterizes the nature of the expenses, and D incorrectly states that CapEx has no depreciation, as it can involve depreciation over time.