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.

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Definitions:

Culturally Situated

A concept or object that is understood and interpreted within the context of a specific culture, reflecting its values, norms, and practices.

Marketing Actions

Initiatives or activities undertaken to promote and sell products or services to a target audience.

Contextual Approach

A method that takes into account the environment, circumstances, or background of a subject to better understand its behavior or function.

Competitors

Are entities or individuals that compete within the same market or field, aiming to achieve goals such as higher sales or superior performance.