Budgeting in uncertainty is challenging. The decisions made by budget managers affect the direction and future of every company. Having a thorough understanding of the components of capital budgeting is essential to developing an appropriate budget.
Choose a public company, and discuss the following:
- In your opinion, what is 1 long-term goal of the company? Explain your answer.
- What is a capital expenditure?
- Describe a capital expenditure of the company. Why is this item a capital expenditure? Explain your answer.
- How does this capital expenditure contribute to the long-term goals of the company as described earlier? Explain your answer.
- What are the challenges for the budget manager for this particular capital expenditure? Explain your answer.
- What is a potential solution for the budget manager? Explain your answer.