Finance teams group spending into two kinds, and the Microsoft Azure Fundamentals exam (AZ-900) expects you to recognize both. Capital expenditure (CapEx) is money spent up front on physical assets that the organization owns and uses for years, such as servers, storage arrays, network equipment or a building. Because the asset lasts several years, its cost is usually spread over its useful life on the books through depreciation, which gradually reduces the recorded value of the asset.
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