CTO CTO Budget & Financial Management 2

Question 1

What is the key difference between CapEx and OpEx technology spending?

Accepted Answer

CapEx is capitalized over time while OpEx is expensed in the current period

Answer

CapEx investments are depreciated over their useful life on the balance sheet, while OpEx costs are recognized immediately in the income statement.

Question 2

A CTO adopts a cloud-first strategy. What financial shift does this typically create?

Accepted Answer

Decrease in CapEx, increase in OpEx

Answer

Cloud adoption replaces large upfront capital expenditures with ongoing operational subscription costs, shifting the spending profile from CapEx to OpEx.

Question 3

Which practice helps a CTO maintain financial discipline over a multi-year technology program?

Accepted Answer

Implementing stage-gate funding reviews tied to milestone delivery

Answer

Stage-gate reviews release funding incrementally based on proven milestone achievement, reducing financial risk in long-horizon programs.

Question 4

What does a technology cost-benefit analysis primarily help a CTO communicate to the board?

Accepted Answer

Expected monetary and strategic value relative to investment cost

Answer

A cost-benefit analysis translates a technical initiative into business language by quantifying expected benefits against costs, enabling informed board decisions.

Question 5

A CTO notices cloud infrastructure spend has grown 40% year-over-year without proportional business growth. What discipline should be applied?

Accepted Answer

Implement FinOps practices including tagging, rightsizing, and cost allocation

Answer

FinOps brings engineering, finance, and business together to optimize cloud spend through visibility, accountability, and continuous rightsizing.

(CTO) Certified Chief Technology Officer Practice Test

(CTO) Certified Chief Technology Officer Practice Test

CTO CTO Budget & Financial Management 2