What do the terms OpEx and CapEx refer to?
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https://www.investopedia.com/ask/answers/112814/whats-difference-between-capital-expenditures-capex-and-operational-expenditures-opex.aspThe terms OpEx and CapEx refer to different types of expenditures or expenses that a business may incur, especially in relation to its operations and investments.
OpEx stands for Operational Expenditure, which refers to the expenses or costs associated with the day-to-day operations of a business, including salaries, rent, utilities, supplies, maintenance, and other expenses required to keep the business running. These are expenses that are incurred regularly and are usually considered as a part of the operating budget. Examples of OpEx in an IT context could include salaries of IT staff, software licenses, and cloud service subscriptions.
On the other hand, CapEx stands for Capital Expenditure, which refers to the expenses incurred by a business for investments in long-term assets, such as buildings, equipment, machinery, and infrastructure, that are expected to provide a benefit to the business for a period of more than one year. These are expenses that are generally incurred infrequently, and usually require significant planning and budgeting. Examples of CapEx in an IT context could include purchasing new servers, building data centers, or acquiring expensive hardware or software that will be used for several years.
In summary, OpEx refers to the day-to-day expenses required to keep a business running, while CapEx refers to the expenses incurred for long-term investments in assets that are expected to provide value over several years.