ABSTRACT
Don’t tell me what you value, show me your budget, and I’ll tell you what you value.
Joe Biden
In Chapter 7, we discussed pro forma financial statements. One of the important inputs is planned long-term investments. How do we decide what long-term investments should be made? In this chapter, we provide tools that enable entrepreneurs to answer this question, which is called the “capital budgeting decision.” The amount of estimated long-term investments is referred to as the capital budget.
