Strategic planning for the purchase of a new piece of manufacturing equipment would be an example of what type of budgeting?

Strategic planning for the purchase of a new piece of manufacturing equipment aligns with capital budgeting because this type of budgeting focuses specifically on the allocation of resources for long-term investments. Capital budgeting involves evaluating the potential expenditures or investments in assets that will be used for more than one year, such as machinery, equipment, or real estate.

This process typically includes assessing the costs and benefits of the investment, estimating future cash flows, and determining the impact on the organization's financial health. It requires careful consideration of how the new equipment will contribute to overall operational efficiency, increase production capacity, or enhance product quality over an extended period.

In contrast, operational budgeting deals with the day-to-day expenses and revenues of running a business, such as wages, utilities, and inventory costs. Because the question pertains to a significant investment decision impacting the company's long-term capability, capital budgeting is the appropriate category. Understanding this distinction helps clarify why capital budgeting is concerned with investments in fixed assets that support the strategic goals of the business.