Capital Budget

Posted in Finance, Accounting and Economics Terms, Total Reads: 2105

Definition: Capital Budget

Capital Budget is the entire plan incorporating all the long term and short term projects which the firm will undertake.

It also shows the sources of funds and the cash inflows and outflows over the long and short term from these projects by using capital budgeting techniques such as internal rate of return, net present value and payback period method.

It thus demonstrates the current projects that the firm is into and also the future investments in the pipeline.

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