Certified Dietary Manager (CDM) Practice Exam

Which of the following best describes capital equipment?

1. A low-cost piece of equipment used for daily tasks

2. An expensive piece of equipment with a short lifespan

3. An inexpensive item that is commonly discarded

4. An expensive piece of equipment with a long life

The correct answer is: An expensive piece of equipment with a long life

Capital equipment is best described as an expensive piece of equipment with a long life. This type of equipment is typically significant in cost and is essential for the operations of a facility, such as in a dietary service or food production environment. The long lifespan of capital equipment means that it is intended for long-term use, usually several years, and is not frequently replaced. This category of equipment often includes items such as commercial ovens, refrigerators, and food processors. Due to their cost and durability, capital equipment cannot be easily written off as an operational expense; instead, it is often subject to depreciation over time on financial statements. Items that are low-cost and used for daily tasks generally fall into a different category, as they are not capital investments and do not have the same financial implications. Similarly, inexpensive items that are commonly discarded do not represent an investment in capital equipment. Equipment with a short lifespan would also not qualify as capital equipment, as the expectation is that such items should provide service over an extended period before needing replacement.