Submitted by angrybird7677 t3_zzswm0 in explainlikeimfive
mtgguy999 t1_j2fiff7 wrote
Reply to comment by stilsjx in ELI5: Why do companies require annual budget be spent 100%? by angrybird7677
But you don’t know if the sink will break that year or how it will break. So you’re incentivized to budget for it breaking in the most expensive way possible every year just in case it does break you can cover it. And when it doesn’t break you still gotta spend that money because you budgeted it. You might go 10 years with no breaks wasting $1,000. But in year 11 years be glad that you have that $100 to cover it when it actually breaks that year.
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