alt Hacker NewsDid you just write a short lesson to explain the difference between capex and opex? Well... thank you, I guess.
But again, the question is: is it ever rational for a functional unit manager to be given a particular maximum opex budget and not be allowed to capitalize a part of that? What benefit would such a restriction offer to the business?
> What benefit would such a restriction offer to the business?
You approve opex budget for the widget department because you know they can turn 10 cents of plastic into $1 of widgets, and you want them doing that in the forthcoming quarter. You're happy for them to spend a nigh-unlimited amount on inputs like plastic, so long as it's on things with a 90% margin.
But you don't want the department head spending their nigh-unlimited budget on things that don't get sold on with a 90% margin. So you don't let them charge the O'Reilly books to the nigh-unlimited part of their budget.