Capital budgeting involves choosing among various capital projects to find the one(s) that will maximize a company's return on its financial investment. Which of the following parties approves the capital budget?
Capital budgeting involves long-term investment decisions, such as purchasing new equipment, expanding facilities, or launching new products. These strategic financial decisions require approval at the highest level of governance.
The Board of Directors (Option A) is responsible for reviewing and approving capital budgets, ensuring alignment with corporate strategy.
Senior management (Option B) and the CFO (Option C) contribute by evaluating proposals, but they typically do not have final approval authority.
Accounting personnel (Option D) manage financial reporting but do not approve budgets.
Thus, the Board of Directors (A) is the correct answer.
Chosen Answer:
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