How are Capital Expenditures Different from Operating Expenses?
Capital expenditures are distinct from operating expenses (OpEx). While OpEx covers the day-to-day costs of running a business, such as rent, utilities, and salaries, CapEx is focused on long-term investment. Typically, OpEx is fully deductible in the year it is incurred, whereas CapEx is capitalized and depreciated over the useful life of the asset.