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1. Proper handling of human relations is essential to the establishment of an effective budgeting system. There is a natural tendency for people to be uncomfortable with budgets. Describe how participative budgeting helps create a healthy atmosphere surrounding the budgeting process. Would you recommend that businesses employ a participative approach to budgeting? Why or why not?
2. What are the distinguishable characteristics of capital budgeting decisions and in what ways can accountants add value to the capital budgeting process. Compare the different methods (pros and cons) used to make capital investment decisions and the best one from your point of view. Provide 2 examples of capital investment decisions.

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