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Which of the following is not an advantage of OpEx costs over capital expenses (CapEx) costs?a)OpEx costs are not tax deductibleb)OpEx costs are easier to predict and budget forc)OpEx costs are tax deductibled)OpEx costs can be scaled up or down as needed

Question

Which of the following is not an advantage of OpEx costs over capital expenses (CapEx) costs?a)OpEx costs are not tax deductibleb)OpEx costs are easier to predict and budget forc)OpEx costs are tax deductibled)OpEx costs can be scaled up or down as needed

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Solution

The correct answer is a) OpEx costs are not tax deductible. This is not an advantage of OpEx costs over CapEx costs. In fact, both OpEx and CapEx costs can be tax deductible. The main difference is that CapEx costs are capitalized and depreciated over time, while OpEx costs are deducted in the period they are incurred.

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