Capital budgeting covers fixed assets such as land, buildings, and long-life capital projects financed over two or more years. It is based on the overall operating plan and is part of the strategic vision for the organization.
Assess the external factors that can influence capital budget decisions, including financing sources, types of third-party payers via reimbursement rates, rate control agencies that affect rates that may be charged, and planning or government agencies that affect approval or disapproval of projects. Determine how business managers understand the complexity of factors influencing decision-making and approving or denying capital project proposals.
This discussion aligns with the following module objectives:
- Apply fundamental concepts and practices of financial management and accounting to an organization.
- Analyze financial statements and other financial-operational reports to evaluate an organization’s overall operational and financial stability.
- Analyze the utilization of financial indicators to predict future financial performance