Operating Expenses are defined as:

• A. Expenses related to conducting the business, generally fall into two main categories: selling or general/administrative.
• B. The costs of raw materials.
• C. The interest payments on debt.
• D. The depreciation expense.

Answer: (C)

Operating expenses are the ongoing costs required to run the business and keep operations going. In this framing, interest payments on debt are viewed as a regular cost that finances and sustains operations, so they’re categorized under operating expenses. That makes interest a fit for the definition in this context.

The other options point to different types of costs: raw materials are tied to production costs (cost of goods sold), depreciation is a non-cash allocation that some frameworks treat separately, and interest is the financing charge rather than a direct operating activity in many standard definitions. Here, the question’s convention considers financing-related costs as part of operating expenses, which is why the interest payments on debt is the best choice.