Capital Budget is formulated on a five-year basis.

Capital Budget is formulated on a five-year basis.

• A. False
• B. True
• C. It depends on the agency
• D. Not standardized

Answer: (B)

Capital budgeting uses a planning horizon that looks ahead to major, long-lived expenditures. In governmental practice, the Capital Budget is typically developed on a five-year basis because many projects—roads, facilities, major equipment—span multiple years and require multi-year funding, debt planning, and interdepartmental coordination. A five-year window aligns project lifespans with funding sources and helps ensure that operating budgets can absorb any resulting costs. While agencies may tailor specifics of process or timing, the standard expectation is a five-year Capital Budget, making the statement true. If one sees variations, they are details of implementation rather than a change in the fundamental approach.

Capital budgeting uses a planning horizon that looks ahead to major, long-lived expenditures. In governmental practice, the Capital Budget is typically developed on a five-year basis because many projects—roads, facilities, major equipment—span multiple years and require multi-year funding, debt planning, and interdepartmental coordination. A five-year window aligns project lifespans with funding sources and helps ensure that operating budgets can absorb any resulting costs. While agencies may tailor specifics of process or timing, the standard expectation is a five-year Capital Budget, making the statement true. If one sees variations, they are details of implementation rather than a change in the fundamental approach.