Question

Agree/Disagree and Why?

Operational budgets are the highlight of a business/company’s income/revenues and costs/expenses in terms of what their detailed projections are. Their income statement is affected by the anticipated cash flows resulting from buying and selling activities and recorded on their budget. Capital budgets are expenses used for equipment or asset purchases based on the projected need for a particular asset/equipment. Businesses/companies factor these long-term capital expenses into their budgets and subsequent balance sheets. Their differences between the two budgets is that the planning for capital budgets is projected beyond an annual-term whereas operational budgets which are done annually.

If some or all of a variable contains an integer, then it is considered an Integer Linear Program, which is defined that if there are an extra variable requirement involved, then the expectation is that at least one of those variables must be an integer in order to be defined as an Integer Linear program.

Answer 1

Agree/Disagree and Why?

Operational budgets are the highlight of a business/company’s income/revenues and costs/expenses in terms of what their detailed projections are. Their income statement is affected by the anticipated cash flows resulting from buying and selling activities and recorded on their budget. Capital budgets are expenses used for equipment or asset purchases based on the projected need for a particular asset/equipment. Businesses/companies factor these long-term capital expenses into their budgets and subsequent balance sheets. Their differences between the two budgets is that the planning for capital budgets is projected beyond an annual-term whereas operational budgets which are done annually.

Answer 1 -

I agree with the mentioned statement. Operational budget contains the projection of revenue and expenditure generated from the daily business for the upcoming year or certain period of time. Operational budget record the expected cash flows from the firm's buying and selling activities and their effects on the income statement of the company. Operational budgets are prepared generally for one fiscal year and sometimes for quarter as well.

Capital budget contains the projection of expenses for the acquisition or maintenance of fixed assets such as land, buildings, and equipment. Capital expenditure is treated as asset in balance sheet.

Difference between operational and capital budget is that the operating budget focuses on the day-to-day business and it usually covers a one fiscal year and Capital budgets focus on investment strategy and are usually long-term as it can be extended over five or 10 years.

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