Which item would be included in the Capital Budget?

Which item would be included in the Capital Budget?

• A. Office supplies
• B. Utilities
• C. Sick leave
• D. CAD systems

Answer: (D)

Capital budgeting focuses on acquiring or upgrading long-term assets that will provide value over multiple years. A CAD system qualifies as a long-term asset—whether hardware, software, or an integrated platform—that will be used for many years and typically is capitalized and depreciated over its useful life. Because of its size, durability, and multi-year payoff, it belongs in the Capital Budget to reflect the investment in the agency’s core capabilities for dispatch and design. In contrast, office supplies are consumed within a short period and are treated as operating expenses; utilities are ongoing costs required to run daily operations; sick leave represents compensation-related costs tied to staffing, not a lasting asset.

Capital budgeting focuses on acquiring or upgrading long-term assets that will provide value over multiple years. A CAD system qualifies as a long-term asset—whether hardware, software, or an integrated platform—that will be used for many years and typically is capitalized and depreciated over its useful life. Because of its size, durability, and multi-year payoff, it belongs in the Capital Budget to reflect the investment in the agency’s core capabilities for dispatch and design.

In contrast, office supplies are consumed within a short period and are treated as operating expenses; utilities are ongoing costs required to run daily operations; sick leave represents compensation-related costs tied to staffing, not a lasting asset.