11.5 Controlling Capital Investment Expenditures

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.

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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