a) is a company’s plan on how to acquire substantial and long-term funds intended for investing into machinery or building a new factory or other industrial establishments for the duration that is longer than the one included in the operation budget. To develop a capital budget organizations use such methods as internal rate of return and payback period.
b) is a company’s budget that contains capital receipts and fees as well as transactions that occurred in the public account.
In a Sentence:
One of the primary responsibilities of a large corporation is to have as much of a capital budget as possible to able to invest funds whenever a promising deal may arise.
We’ve been working on a capital budget idea that will require quite a substantial amount of money but should prove to be extremely profitable in the long run.
The auditor’s that they’ve hired said that the capital budget is professionally planned and updated on a regular basis.
Synonyms and related words: capital receipts, capital payment, net present value, payback period, market loan