Holicent
VIP Contributor
Capital budgeting is the process of deciding how much money to put into a business to fund projects, like new equipment or new production lines. You can use capital budgeting to make sure that you're getting the best return on your investment. You might decide that it's better to buy a new machine instead of hiring someone to do the work for you, or that it's cheaper to invest in new equipment than in training new employees.
However, it's important not to get too attached to any one idea and ignore others that could be better for your business—for example, if you decide not to spend money on a piece of equipment because it doesn't fit well with the existing infrastructure at your plant, then you could miss out on opportunities for growth. Capital budgets are usually made up of three different types of expenses: fixed costs (like rent or utilities), variable costs (everything else), and assets (the things you own).
However, it's important not to get too attached to any one idea and ignore others that could be better for your business—for example, if you decide not to spend money on a piece of equipment because it doesn't fit well with the existing infrastructure at your plant, then you could miss out on opportunities for growth. Capital budgets are usually made up of three different types of expenses: fixed costs (like rent or utilities), variable costs (everything else), and assets (the things you own).
