11.6: Controlling Capital Investment Expenditures
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During the budget process, a company should prepare a capital expenditures budget. This budget may affect the cash budget, the budgeted income statement and the budgeted balance sheet so it should be prepared before these final budgets are prepared.
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The capital expenditure budget should not if the capital projects will be paid with cash or with a liability. We will need this information to budget for depreciation on the capital projects as well as the cash payments in the cash budget.
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