Wednesday, May 6, 2009

What is Capital Budgeting?

In accounting, capital budgeting is about how a firm will utilize its fixed assets, such as a factory, to make use and make returns off of long-term investments.

A good example of this is a decision made by management to construct a new factory with machinery in order to meet demand for a new product. This is a capital budgeting decision

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The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.