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Companies trust capital expenses more than operational expenses for some strange reason. I don't know why.
by salamander014 7y ago
Companies trust capital expenses more than operational expenses for some strange reason. I don't know why.
- organsnyder 7y agoI think it's psychological. With capital expenses, the decision to spend a lot of money tends to be a discrete event/process, while operations usually grow slowly over time. We place inherent value in big purchases—after all, I decided to make the purchase, so it must be valuable.
- bumby 7y agoCost Bias: A fallacy of ethos (that of a product), the fact that something expensive (either in terms of money, or something that is "hard fought" or "hard won" or for which one "paid dearly") is generally valued more highly than something obtained free or cheaply, regardless of the item's real quality, utility or true value to the purchaser.[1] [1] http://utminers.utep.edu/omwilliamson/ENGL1311/fallacies.htm http://utminers.utep.edu/omwilliamson/ENGL1311/fallacies.htm
- sjy 7y agoAre consultants’ fees generally accounted for as capital expenditure? Seems more operational to me.