Final answer:
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:
- Depreciation calculations are required.
- It considers the time value of money.
- Operating expenses are not relevant.
- 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.