Capital Budgeting Essays (Examples)

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Capital Budget in Recreation in

Words: 1338 Length: 5 Pages Document Type: Essay Paper #: 62456257

To solve these emerging needs of the company to satisfy the demand in the market, it is necessary to invest into expanding of the services offered and shifting the existing concept of the club. Firstly, it is necessary to expand the space occupied by renting out additional premises and organizing Spa procedures there. This will require also investment into necessary human resources, such as hiring Spa administrative and consultants specialists offering services for both women and men, and for both facials and body treatment to maximize the services mix. Costs for occupying this space, purchasing necessary equipment and hiring adequate staff so can exceed the current costs by ?450,000, so this is the incremental expense from proceeding with this services expansion programs. Cost to organize the fitness and Spa cafe, which is proposed to call at EnerGi Box, will amount to another ?100,000 annually. The final improvement step is investment…… [Read More]

References

http://www.thecitypointclub.co.uk/

Brayley, R.E., McLean, D. (1999). Managing Financial Resources in Sport and Leisure Service Organizations, Sports Publishing.

Mitchell, D. Coles, C. (2004) Establishing a continuing business model innovation process, Journal of Business Strategy, 25 (3), pp. 39-49.

D. Mitchell, C. Coles, Establishing a continuing business model innovation process, Journal of Business Strategy, Volume 25, No. 3, 2004, pp. 39-49. http://www.thecitypointclub.co.uk/
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Capital Budget Processes and Techniques People Often

Words: 789 Length: 3 Pages Document Type: Essay Paper #: 5631191

Capital Budget Processes and Techniques

People often ask what happens when there is a surplus of imports brought into the U.S. Many think that we just have more of what we brought in to be able to hang on to and sell at a later date but that is not the case. When there is a surplus of the products that have been brought in then the price of what the surplus is will drop. Unlike when there just isn't enough for the demand for the product then the price will raise. The reason that the price will drop is due to the products already have been paid for and now they are storing the products which cost money.

When the price is dropped then this allows for the product to be moved quickly and make room for more product and different kind of product. By doing this the price…… [Read More]

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Capital Budget

Words: 720 Length: 2 Pages Document Type: Essay Paper #: 35468423

River County's Capital Budget

River County Capital Budget

Here at River County we have put together a capital budget because we are planning to make several principal achievements for the next year of business in 2012 because we believe that after further evaluation of the investments we have made in 2010 has helped us determine which items are beneficial to the company and the consumer. What we must ask ourselves at River County is "If we continue to purchase these types of items in the future, will the profit to our corporation be larger that the expenditure of the asset?" We realize that these items do vary; however, we are able to see the positives and negatives of these smaller and larger units by not only calculating the different costs and expected years of the product or asset, but to look at the company's averages, as well.

In reference to…… [Read More]

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Capital Budget for River County Public Administration

Words: 633 Length: 2 Pages Document Type: Essay Paper #: 45280716

Capital Budget for iver County

In the current dynamic business environment, finance managers are continually faced with decisions on the best type on assets to invest in. County governments, for instance, have to analyze various investment decisions on behalf of the residents, and to estimate costs and benefits that are related to these decisions. According to Peterson and Fabozzi (2002), firms, as well as counties, should continually invest funds in assets in order to produce incomes and cash flows that will promote growth. In particular, capital assets like equipment, machinery and vehicles, which have a long estimated life, require thorough planning to ensure they give good returns on investment. Baker and English (2011) also state that it is imperative for finance managers to project the cost of capital expenditures to establish whether there is enough cash for asset acquisition and if not, consider alternative methods, such as leasing or renting.…… [Read More]

References

Baker, H.K. & English, P. (2011) Capital Budgeting Valuation: Financial Analysis for Today's Investment Projects. Hoboken, New Jersey: John Wiley & Sons, Inc.

Peterson, P. & Fabozzi, F.J. (2002) Capital Budgeting: Theory and Practice. New York, NY: John Wiley & Sons, Inc.
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Value and Capital Budget the Reference Company

Words: 480 Length: 2 Pages Document Type: Essay Paper #: 50320652

Value and Capital Budget

The reference company in this case is Starbucks. The company is currently trading at $53.55 (Yahoo! Finance, 2012). The five-year chart for Starbucks is as follows:

Yahoo! Finance (2012)

The company's current upward trajectory basically began when it rehired former CEO Howard Schultz to run the company again. Since that point in time, Starbucks have seen its former success rate be restored and the share price has been rising steadily (Kaplan, 2011). The improvement in the stock price has been about $10 per year and there is no reason to think that, with a strong economy this year, Starbucks will not continue to see this rate of growth. The futures price for 100 shares of Starbucks one year into the future will be around $65 * 100 = $6,500.

The stock price has been steadily improving. Although Starbucks does have higher than average volatility (beta 1.28),…… [Read More]

Works Cited:

Baertlein, L. (2012). Starbucks goes beyond coffee with first juice bar. Reuters. Retrieved March 20, 2012 from http://www.reuters.com/article/2012/03/20/us-starbucks-juice-idUSBRE82I05Y20120320

Kaplan, D. (2011). Howard Schultz brews strong coffee at Starbucks. CNN Money. Retrieved March 20, 2012 from http://management.fortune.cnn.com/2011/11/17/starbucks-howard-schultz-business-person-year/

Yahoo! Finance. (2012). Starbucks. Yahoo!. Retrieved March 20, 2012 from http://finance.yahoo.com/q?s=SBUX&ql=1
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Capital Investment Planning and Budgeting

Words: 1325 Length: 4 Pages Document Type: Essay Paper #: 26641655

Capital Investment and Budget Planning

Capital and Investment Budget Planning

For all governments, long-term expenses are something they must deal with. This is to ensure that the continuing needs of an area are met through facilitating economic growth and addressing the demands of the general public. To fully understand this process requires examining the capital and investment budget planning process. This will be accomplished by comparing the city of Toronto's budget presentation with the 8 step method and carefully analyzing this model. Together, these elements will highlight how administrators are able to account for spending on large projects and ensure that there is enough funding to meet these needs every single year.

Part

Compare Toronto's capital budget presentation with the eight step model

For the most part, the city of Toronto is following the eight step model to highlight the long-term needs of the area between 2009 and 2018. Some…… [Read More]

References

2009 to 2013 Recommended Capital Budget and Plan. (2008). City of Toronto. Retrieved from: http://www.toronto.ca/budget2009/pdf/2009_capital_EC_presentation_public.pdf

Capital Assets. (n.d.)

Brooks, R. (2009). Financial Management and Core Concepts. Boston, MA: Prentice Hall.
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Capital Project Analysis

Words: 1319 Length: 4 Pages Document Type: Essay Paper #: 6992058

Capital Project

According to the AMA, capital budgeting is "the decision-making process used by companies to evaluate long-term investments in large capital assets" (Hampton, 2011). Zeit (2013) makes the point that construction projects are included in the category of capital investment decisions, and that designers and architects are often involved. eiter et al. (2000) argue that because of their size and critical strategic nature, "capital investment decisions are among the most important decisions made by firms."

What this means is that capital projects tend to be large-scale projects that have several key characteristics. They require a lot of money, to the point where that money may need to be acquired through financing. So construction projects in particular like new buildings or new wings would qualify. There is some ambiguity in the research if a takeover or merger would qualify as a capital project when financed with cash, but a small-scale…… [Read More]

References:

Cleverley, W., Song, P, & Cleverley, J. (2011). Essentials of Health Care Finance. Sudbury, MA: Jones & Bartlett Publishing.

FASB. (1985). Statement of financial accounting concepts No. 6. Financial Accounting Standards Board. Retrieved October 12, 2013 from http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175822102897&blobheader=application%2Fpdf

Hampton, J. (2011). The AMA handbook of financial management. AMACOM. Chapter 10.

Reiter, K., Smith, D., Wheeler, J. & Rivenson, H. (2000). Capital investment strategies in health care systems. Journal of Health Care Finance. Vol. 26 (4) 31-41.
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Budgeting Process Budgeting Information One

Words: 1143 Length: 4 Pages Document Type: Essay Paper #: 80928546

Due to Ford's international presence, this database needed to be accessible remotely, and so the database was created to have remote access from any browser in Ford's locations in 120 countries. Utilizing this technology is a fundamental piece of Ford's mission, therefore it was important to make sure that technology used would be accessible and easily manageable by its employees. Since the technology used is simple enough to be used on a regular browser, there is little in depth technology training needed by the majority of employees who would be using and accessing the system. This helps reduce training costs as well as ensures practical usage within the company. Since Ford's financial position has taken a tumble from its successful days of the past, this technology proves essential in reducing unnecessary costs and helps keep the company running as smoothly as possible without reckless spending. Eliminating unnecessary high maintenance costs…… [Read More]

References

Oracle. 2009. PeopleSoft gives Ford the ability to operate globally as one company, with accounting, analysis, GAAP reporting, and statutory reporting on one system. Tech Republic. http://whitepapers.techrepublic.com.com/abstract.aspx?docid=128640. [18 July 2009].

Takana, Yuji. 2004. Transformation of the budgeting process. Jnet. http://us.kpmg.com/jnet/English/Archives/2004/MayJune/Budget_E.pdf. [18 July 2009].
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Capital Asset Pricing Model and Arbitrage Pricing

Words: 3670 Length: 11 Pages Document Type: Essay Paper #: 4448460

Capital Asset Pricing Model and Arbitrage Pricing Theory:

Capital Asset Pricing Model (CAPM) is an arithmetical theory that describes the relationship between risk and return in a balanced market. The Capital Assets Pricing Model was autonomously and simultaneously developed by William Sharpe, Jan Mossin, and John Litner. The researches of these founders were published in three different and highly respected journal articles between 1964 and 1966. Since its inception, the model has been used in various applications that range from public utility rates to corporate capital budgeting. However, the initial introduction of the model was characterized by suspicious view from the investment community. This was largely because CAPM apparently indicated that professional investment management was hugely a waste of time. Due to its implementation problems and shortcomings associated with its relation to Arbitrage Pricing Theory, Capital Asset Pricing Model has continued to face constant academic attacks.

Overview of Capital Asset…… [Read More]

References:

Banz, R.W (1981), 'The Relationship Between Return And Market Value of Common Stocks,'

Journal of Financial Economics, vol. 9, no. 1, pp. 3-18.

Cooper, R.A. & Cousins, J.K (n.d.), Capital Asset Pricing Model (CAPM), Reference for Business, viewed 11 January 2012,

Donovan, E. & Weinraub, H (2007), Capital Asset Pricing Model (CAPM) vs. Arbitrage Pricing
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Budget Building a Profit Plan

Words: 2893 Length: 10 Pages Document Type: Essay Paper #: 48166924



Operating expenses include selling and administrative expense. Ordinarily, a forecast or budget for selling expenses is prepared together with the sales budget or profit target because selling efforts such as promotions, commissions and salaries of the sales staff are directly related to sales. Selling expenses may either be variable or fixed. Administrative expenses include projected administrative costs for other than production or selling activities. These expenses are mostly composed of fixed costs such as research and development, insurance payments and government taxes.

3. Calculate expected profits

Profit is the excess of revenue over total costs and expenses incurred in generating such revenue during the period of operation. Profit can be expressed in the mathematical equation:

Profit = Sales - Total Costs and Expenses]

Costs having been considered, the budgeted profit plan may now be established. Injecting the concept of 'revenue less expenses equals profit,' the profit may be calculated as…… [Read More]

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Budget DQ1a I Don't Need

Words: 1073 Length: 3 Pages Document Type: Essay Paper #: 89806186

Looking over a spreadsheet can clarify when to make larger purchases, such as waiting until the start of a new billing cycle, or negotiating better payment terms offered by suppliers and any creditors, especially when interest rates are volatile.

Once the need for a budget is established then the organization can consider what type of budget it desires. For example, with zero-based budgeting, "all expenses must be justified for each new period. Every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one" (Zero-based budgeting, 2009, Investopedia). hile it is true that zero-based budgeting is more costly than traditional cost-based budgeting, it also favors enterprises specializing in areas "that achieve direct revenues or production" in the enterprise (Zero-based budgeting, 2009, Investopedia). For larger organizations,…… [Read More]

Works Cited

Activity-based budgeting.. (2009). Investopedia. Retrieved February 25, 2009 at   http://www.investopedia.com /terms/a/abb.asp  (Thebeauty of budgeting 2009). Investopedia. Retrieved February 25, 2009 at  
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Capital Investments in Emerging Markets

Words: 1619 Length: 5 Pages Document Type: Essay Paper #: 27297037

General Electric Company is one of the most acknowledged companies across the world. The company's center of operations is situated in Boston. In particular, the manufacturing company has various business operations in different segments. These include oil and gas, power and water, aviation and transportation. This shows the company's versatility in manufacturing as it ranges from the engineering industry to automotive industry. The company's prevailing revenue generated lies in the range of $140.39 billion as of the 2015 fiscal year. In the 2012 financial year, the company was ranked as the fourth biggest firm in the world. General Electric Company manufactures aircraft engines, locomotives and other transportation apparatus, lighting, electric control gear, generators and turbines, and medical imaging paraphernalia. In addition, the company is the owner of GE Capital, which provides commercial finance, commercial aircraft leasing, real estate, and financial services for the energy sector (Hoovers, 2016). Since its establishment…… [Read More]

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A Set of Questions Regarding Capital

Words: 583 Length: 2 Pages Document Type: Essay Paper #: 32693835

Capital budgeting is an important process for all organizations because it gives them the means to compare different investments. For example, a manager can use capital budgeting to evaluate different proposed projects in the organization to attempt to estimate which one's will return the most value to the organization and its investors.

"When a company is looking at, for example, acquisitions of other companies, development of new lines of business or major purchases of plants or equipment, capital budgeting is the method used to determine whether one option is better than another. There are several capital budgeting methods, each with its pros and cons (Financial Web, N.d.).

There are several methods of using a capital budgeting process and each method can be more appropriate in certain situations over the others.

The misuse of capital budgeting can be extremely costly to organizations because they might devote large capital allocations to projects…… [Read More]

References

Financial Web. (N.d.). Advantages and Disadvantages of Capital Budgeting. Retrieved from Financial Web: http://www.finweb.com/financial-planning/advantages-and-disadvantages-of-capital-budgeting.html#axzz3lTAqL6zS

Investopedia. (N.d.). Net Present Value And Internal Rate Of Return - Profitability Index. Retrieved from Investopedia:  http://www.investopedia.com /walkthrough/corporate-finance/4/npv-irr/profitability-index.aspx
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NPV Mirr IRR Cost of Capital

Words: 725 Length: 2 Pages Document Type: Essay Paper #: 76171979

Capital Budgeting

einvestment rates are an embodied assumption in the NPV, I and MI methods because in each of those methods, the cost of capital for the company is typically used as the discount rate. The cost of capital for the company is going to be comprised of the different elements of the capital structure, but in each of those the reinvestment rate is a key factor. It is assumed that the cost of capital is the reinvestment rate under each of these methods, and this assumption introduces the potential for error.

The assumed reinvestment rate of MI is the cost of capital, but this is problematic for a couple of reasons. The first is that this does not take into account project-specific risk (Damodar, n.d.). Each project has its own risk. Thus, the reinvestment rate should not necessarily be the same rate that is used in an NPV, I…… [Read More]

References

"Chapter 10: Capital budgeting -- why it matters" (2014) Norwich University. In possession of the author.

Damodar, A. (no date) The components of risk. NYU Stern School of Business. Retrieved Jul 12, 2016 from  http://pages.stern.nyu.edu/~adamodar/New_Home_Page/invfables/riskcomponents.htm
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Capital Project Results and Acceptability of the

Words: 2613 Length: 8 Pages Document Type: Essay Paper #: 9046436

Capital Project

esults and acceptability of the item for key stakeholders

Da Vinci is a lucrative product that has immense contributions to the delivery of health services in many health centres globally. The effectiveness of the product lies on its new entry into the modern market. Da Vinci production and use have enlightened the public and hospital fraternities on new approaches of managing surgery operations. The resultant effects that are going to be felt after using the product are more increasing and beneficial than using the old mechanisms. The innate objective of the tool will improve on delivery of surgery services in ways that are more safe, effective, and affordable to the public. Da Vinci was first introduced as a safe way of improving surgery operations in the hospitals. Moreover, the use of the product had not been made public. Now that the machine will be available in many health…… [Read More]

References

Athanasiou, T., Debas, H.T., & Darzi, A. (2009). Key topics in surgical research and methodology. Berlin: Springer.

Bahouth, M.N., Bahouth, M.N., Blum, K., & Simone, S. (2013). Transitioning into hospital-based practice: A guide for nurse practitioners and administrators. New York, NY:

Springer Pub. Co.

Gitman, L.J., & McDaniel, C.D. (2009). The future of business: The essentials. Mason, OH: