IMANET Exam CMA Topic 1 Question 72 Discussion

Capital budgeting is the process of planning and controlling investments for long-tern, projects It is this long-term aspect of capital budgeting that presents the management accountant with specific challenges. Most financial and management accounting topics concern tracking and reporting activity for a single accounting or reporting cycle, such as one month or one year, By their nature, capital projects affect multiple accounting periods and will constrain the organization's financial planning well into the future. Once made, capital budgeting deacons tend to be relatively inflexible.