Which statement correctly describes CapEx versus OpEx in IT budgeting?

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Study for the SPEA-V 369 Managing Information Technology Exam. Prepare with multiple choice questions and flashcards, each with hints and explanations. Ready yourself for success!

Multiple Choice

Which statement correctly describes CapEx versus OpEx in IT budgeting?

Explanation:
CapEx is for acquiring or upgrading long-term assets with multi-year usefulness, which are capitalized and depreciated over time. OpEx covers the ongoing costs needed to run IT services in the present period, such as cloud subscriptions, maintenance, utilities, and staff expenses. So the statement that CapEx funds long-term assets and OpEx funds ongoing operating costs matches how budgets distinguish between major investments versus day-to-day operations. The other options misalign cloud subscriptions (typically OpEx, not CapEx) or mix up the nature of OpEx and CapEx.

CapEx is for acquiring or upgrading long-term assets with multi-year usefulness, which are capitalized and depreciated over time. OpEx covers the ongoing costs needed to run IT services in the present period, such as cloud subscriptions, maintenance, utilities, and staff expenses. So the statement that CapEx funds long-term assets and OpEx funds ongoing operating costs matches how budgets distinguish between major investments versus day-to-day operations. The other options misalign cloud subscriptions (typically OpEx, not CapEx) or mix up the nature of OpEx and CapEx.

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