Question
Who is involved in the capital budgeting process and what role does each participant play? What type of expenditures are considered in the capital budget?
Who is involved in the capital budgeting process and what role does each participant play? What type of expenditures are considered in the capital budget? Share some examples. How are estimates for the capital budget including initial cost numbers and projected cash flows derived? What methods (payback, net present value, IRR, other) are used in the capital budget process? Does the company use a cost of capital and if so how is it obtained? What time frame is the capital budget process cover? How does the organization evaluate the performance of capital projects and in what way is this performance included in future capital budgets? After reviewing these chapters, what recommendations would you offer your organization in terms of their capital budget process?
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