The Difference Between a Capital Expenditure and an Operating Expenditure

question 24

Multiple Choice

The difference between a capital expenditure and an operating expenditure is that a capital expenditure ____.

• A) is expected to generate returns greater than 10%
• B) involves replacement of a money market account with three-month treasury bills.
• C) is expected to generate future cash benefits lasting longer than one year.
• D) involves a combined effort of the accounting department and the marketing department.