What defines a capital budget?

A capital budget is fundamentally defined as a budget that focuses on planned expenses for long-term investments. This type of budget is crucial for organizations as it outlines expected expenditures on major investments such as infrastructure, equipment, and other significant projects that have a lasting impact on the business's operations and financial health. Unlike operational budgets, which cover day-to-day expenses, the capital budget is concerned with allocating resources to ensure future growth and sustainability through strategic investments. This distinction is key, as it emphasizes the purpose of a capital budget in planning for long-term benefits rather than immediate operational needs. In contrast, other choices reference aspects like operational expenses, cash flow, or marketing expenses, which do not align with the specific intent and focus of a capital budget.