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Definition Of Capital Budgeting

Definitions Of Capital Budgeting:

According to the definition of Charles T. Horngren, “capital budgeting is a long-term planning for making and financing proposed capital out lays.

According to the definition of G.C. Philippatos, “capital budgeting is concerned with the allocation of the firms source financial resources among the available opportunities. The consideration of investment opportunities involves the comparison of the expected future streams of earnings from a project with the immediate and subsequent streams of earning from a project, with the immediate and subsequent streams of expenditure”.

[Post Image Courtesy of Stuart Miles at FreeDigitalPhotos.net]

According to the definition of Richard and Green law, “capital budgeting is acquiring inputs with long-term return”.

According to the definition of Lyrich, “capital budgeting consists in planning development of available capital for the purpose of maximizing the long-term profitability of the concern”.

It is clearly explained in the above definitions that a firm’s scarce financial resources are utilizing the available opportunities. The overall objectives of the company from is to maximize the profits and minimize the expenditure of cost.

About Author Mohamed Abu 'l-Gharaniq

when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries.

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