What is the term for a budget that highlights spending plans for major asset purchases requiring large sums of money?

A capital budget is specifically designed to outline spending plans for major asset purchases that require significant financial investment. These assets can include infrastructure, machinery, land, and equipment that organizations typically acquire to enhance their operations or support long-term growth. A capital budget helps in planning for expenses that will not be incurred frequently, as these are substantial outlays that impact the organization's financial health over extended periods.

This type of budget is crucial for ensuring that funds are allocated appropriately for major expenditures, allowing organizations to assess the viability and potential return on investment of large projects. It serves as a strategic tool for decision-making, enabling management to prioritize projects based on available resources and organizational goals. By contrasting this with other types of budgets, it becomes clear that operating budgets cover day-to-day expenses, while a fixed budget maintains a set expenditure level that does not adjust with changes in activity levels. A resource budget is broader and focuses on the allocation of resources, but does not specifically address major asset purchasing like the capital budget does.