What are a few of the main differences between a capital budget and the general operating budget and how do the budgeting processes differ with each of these?

What are a few of the main differences between a capital budget and the general operating budget and how do the budgeting processes differ with each of these "]

A capital budget focuses on big-ticket items with loans and long-term pay-offs such as building purchases or major renovations , vehicle purchases , or major equipment such as copiers , or equipment necessary to run a specific business . It generally involves depreciation of the item over time . It also involves calculating and compounding interest . For example , let 's say Company X has purchased a piece of

land adjacent to its primary warehouse for 460 ,000 and plans to build an addition that will cost about 540 ,000 . The out over ten years , costing 100 ,000 a year in principal payments . In addition , taxes and interest will cost an additional amount , say 35 (and that 's just a guess , or 35 ,000 , will be taken out of capital reserves on hand and future capital funds taken from excess revenues

The general operating budget , on the other hand , is simply the estimated amount of money anticipated to be earned (revenue ) and spent during the fiscal year . Let 's say , for example , Company X manufactures paint . It has a factory with employees (hourly production workers and management raw materials , mixing and canning or packaging equipment , sales and marketing staff , distribution employees and vehicles , safety and quality improvement staff , support staff such as accountants...