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Business LibreTexts

11.5: 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.