Explain the differences between CAPEX and OPEX.
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When answering this question, focus on defining each term clearly first. For CAPEX (Capital Expenditures), explain that these are the funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, technology, etc. For OPEX (Operating Expenses), describe them as the costs for running day-to-day operations that are expensed on the income statement and affect the profit and loss of an enterprise. Additionally, you can mention the accounting treatment of both and how they impact business strategy and tax considerations.
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Technical question
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