Verified Document

Capital Budget For River County: Public Administration Chapter

¶ … Capital Budget for River 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.

River County is considering several acquisitions for the coming year. It plans to purchase two new garbage trucks with an estimated useful life of 10 years that will cost $150,000 each; one bulldozer with an estimated useful life of 8 years...

All these represent capital expenditure since they will benefit the county for a number of years (Baker and English, 2011).
The capital budget prepared has six columns that display the items to be purchased, their quantity, their estimated useful life, the cost of each item, the total cost for the items budgeted for, and the proportion of the cash budget each item will take up, respectively. The total cost for the two garbage trucks is $300, 000 (2*$150,000); $240,000 ($240,000*1) for the bulldozer; $48,000 ($16,000*3) for the lawn mowers and $650,000 ($650,000*1) for the activity center. The county requires a total of $1,238,000 if it plans to acquire all the items that have been budgeted for. The sixth column shows the proportion of the budget that each item will take up, which is derived by dividing the total cost of each item with the total cost of all the four items budgeted for. Thus, the two garbage trucks take up 24% of the total budget ($300,000/$1,238,000); the bulldozer takes up 19%…

Sources used in this document:
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.
Cite this Document:
Copy Bibliography Citation

Related Documents

Public Vs. Private Personnel Administration
Words: 2887 Length: 10 Document Type: Term Paper

Public Administration vs. Private Personnel Administration Theories of public personnel administration as compared with private personnel administration have arose in recent decades as a result of the emergence of trends in business management. Public administration is directly dependent on the social system as well as the system of production prevalent in society and is an important element of all administrative systems. Changes in the system of production and in the patterns

Expenditure Plan From the Office
Words: 3754 Length: 15 Document Type: Research Paper

.governments are created by law and are continuously regulated by legal provisions found in constitutions, statutes, charters, ordinances, administrative regulations, legislative resolutions and judicial interpretation… the accounting system must produce data and information which indicate the extent to which the financial operations carried out by all agencies of the government pursuant to their designated objectives comply with applicable laws and legal requirements. The existence of a vast network of legal

Unfunded Infrastructure of Canadian Municipalities
Words: 9168 Length: 33 Document Type: Term Paper

(Vander Ploeg, 2003) Key findings stated in the report of Vander Ploeg include the following: Unlike the overall indications of municipal infrastructure needs, which identify water and wastewater infrastructure as having the greatest investment needs, western cities biggest needs exist in the transportation sector. In each of the cities except Vancouver, roads, bridges, interchanges, sidewalks and public transit make up at least half of the annual infrastructure deficit; This may be related

Academic Profile of Home Schoolers a Case Study
Words: 16937 Length: 62 Document Type: Case Study

Academic Profile of Home Schooling - a Case Study Home Schooling vs. Traditional Educational Methods Home Schooling Methodology Focus of the Practicum Culture Area of Inquiry Subject/Topic Areas Home Schooling as an Alternative Curricula and Materials Used for Home Schooling The Success of Home Schooling Evaluation Design Conditions for Change Timeline Chronology Legislative Information: Maryland: A Legal Analysis State Laws and Regulations - Maryland Goulart and Travers vs. Calvert County Home-schooled Kids Find Social Growth" Home Schoolers in the Trenches" Home School Academic Advantage Increases Over Time" Home Schooling." ERIC Digest,

Best Practices in Policing Alcohol
Words: 17761 Length: 40 Document Type: Research Proposal

Of course, it becomes a very difficult matter to overcome sparse levels of availability when they are encountered (e.g. In the more remote regions of Western Australia). Taken together, the issues suggest that the impact of availability policy on the use of alcohol may be as heterogeneous as patterns of availability themselves. The reduction of one outlet in an urban area has significantly different meaning and implications than the reduction

Is the European Union a State or What Else Distinguishes It From...
Words: 9068 Length: 22 Document Type: Research Paper

European Union a state, or what else distinguishes it from other International Organizations The primary question concerning global organizations as a medium of global governance relates towards the quantity and excellence of this governance within an era where we now have an overdeveloped global economy as well as an under-developed global polity (Ougaard and Higgott, 2002). There's a powerful disconnect amid governance, being an efficient and effective collective solution-seeking process

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now