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Describe the difference in Capital and Operational budgeting. How does the manager go about "justifying" them?...

Describe the difference in Capital and Operational budgeting. How does the manager go about "justifying" them? Is there a difference in how to justify?

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Difference between capital and operational budgeting :-

Capital budgets are paid out of future cash flows from the projects, and they represent the sources of funding and the purchases of the fixed assets. Operational budgets project the activities of the firm in buying, selling and paying bills, and usually, is done on an annual basis.

The operating budget focuses on the day-to-day running of the company and it usually covers a one-year period. Capital budgets focus on internal investment strategy and are usually long-term, although they may be updated annually. A typical capital budget will extend over five or 10 years.

An operating budget considers three major areas viz, revenue, expenses, and profits. A financial budget considers cash budget, capital expenditure budget, and budgeted balance sheet

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