Question

Capital budgeting differs from operational budgeting because:

A. depreciation calculations are required.
B. it considers the time value of money.
C. operating expenses are not relevant.
D. capital budgets don't affect cash flow

Answer 1

Capital budgeting differs from operational budgeting because it considers the time value of money.

Step-by-step explanation:

Capital budgeting differs from operational budgeting because:

1. Depreciation calculations are required.
2. It considers the time value of money.
3. Operating expenses are not relevant.
4. Capital budgets don't affect cash flow.

Capital budgeting is the process of evaluating and selecting long-term investments that align with a company's strategic goals. It involves analyzing the cash flows associated with specific projects and considering the time value of money, which accounts for the concept that a dollar received in the future is worth less than a dollar received today.