Budgeting in uncertainty is challenging. The decisions made by budget managers affect the direction

Budgeting in uncertainty is challenging. The decisions made by budget managers affect the direction and future of every company.

Budgeting in uncertainty is challenging. The decisions made by budget managers affect the direction and future of every company. Having a thorough understanding of the components of capital budgeting is essential to developing an appropriate budget.

Choose a public company, and discuss the following:

• In your opinion, what is 1 long-term goal of the company? Explain your answer.
• What is a capital expenditure?
• Describe a capital expenditure of the company. Why is this item a capital expenditure? Explain your answer.
• How does this capital expenditure contribute to the long-term goals of the company as described earlier? Explain your answer.
• What are the challenges for the budget manager for this particular capital expenditure? Explain your answer.

What is a potential solution for the budget manager? Explain your answer.

Solution Preview

Capital budgeting is the process used to make decisions regarding long-term investments of business. It is important to make these decisions and at the right time because the direction and the future of the company depend on it. National Oilwell Varco Inc. is a publically traded oil………………………………

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