Capital budgeting

Capital budgeting is the whole process of analyzing projects and deciding whether they should be included in the capital budget.

Definitions

According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),

Capital budgeting. The whole process of analyzing projects and deciding whether they should be included in the capital budget.

According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),

Capital budgeting. The process of planning expenditures on assets with cash flows that are expected to extend beyond 1 year.

According to Macroeconomics by Mankiw (7th edition),

Capital budgeting. An accounting procedure that measures both assets and liabilities.

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

Capital budgeting. The making of long-run planning decisions for investments in projects.

According to Managerial Accounting by Braun, Tietz (5th edition),

Capital budgeting. The process of making capital investment decisions. Companies make capital investments when they acquire capital assets-assets used for a long period of time.

Related concepts

• Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.

Related lectures

• Introduction to Financial Management.