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CAPEX Concept
CAPEX is the acronym of the English
expression Capital Expenditure and that designates the amount of money
spent in the purchase (or improvements) of capital goods of a certain
company. CAPEX is, thus, the amount of investments made in equipments
and facilities as a way to maintain the production of a product or
service or to keep running a business or a certain system. Opposed,
OPEX
refers to the associated cost of equipment maintenance and the spent
consumables and other operational expenses necessary to production and
maintenance of a running business or system. For example, the purchase
of a machine is CAPEX, while the cost with its maintenance is
OPEX. Many
times, and for several reasons, the companies see the need to switch
CAPEX for OPEX and vice verse. A way to reduce CAPEX for counterpart of
OPEX is the resource to outsourcing and the rent of equipments and
facilities. The most evident advantages of this exchange are the
increase in costs flexibility and the reduction of funding needs (that
now are more diluted in time). A disadvantage can be the costs increase.
Translated from Portuguese
by Susana Saraiva, Portuguese-English and English-Portuguese translation
specialist. Contact: spams@sapo.pt.
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