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 of the different elements that…...

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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.

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…...

Capital Investment isks
Capital investments: Cloud computing for public universities

Cloud computing has many advantages over traditional, hardware-bound computing. "In the current financial crisis and being challenged by growing needs, universities are facing problems in providing necessary information technology (IT) support for educational, research and development activities" (Mircea & Andreescu 2011:1). Public universities have been particularly hard-hit financially because of their reliance upon state funding. States are struggling to provide the bare minimum of services for residents, while facing reduced revenue from state income taxes, sales taxes, and other sources of funding. Switching to cloud computing could be both financially and technologically advantageous for residents. Also at "the moment universities are confronting with a dramatic increase of costs in higher education, more than the inflation rate" because of increased enrollment that is unlikely to abate, even after the financial crisis becomes less serious (Golden, 2010). The decrease of universities' budgets has also…...

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References

Mircea, Marinela & Anca Ioana Andreescu. (2011). Using cloud computing in higher

education: A strategy to improve agility in the current financial crisis.

IBIMA. Retrieved:

 http://www.ibimapublishing.com/journals/CIBIMA/2011/875547/875547.pdf

Thus, the paper provides the following recommendations on the strategies that the company will use to prepare its 3-year financial plan to achieve its corporate objectives.

First, Aztec needs to rely more on the share capital as source of fund than raising fund from the bank loan. Loan capital is the fund borrowed from the bank while the share capital represents the funds raised by selling shares to the public. Typically, share capital should be clearly a preferred option of raising fund because the company only liable to pay dividends for such funds which is only between 2 and 3% of the market value of the equity per annum. On the other hand, loan capital is a borrowed fund that has a fixed interest which a company should pay no matter its financial conditions.

Aztec would enjoy several advantages from raising fund from the share capital. First, the company will be able…...

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References

Afonso, a. (2009). Determinants in using of capital investment appraisal methods: Evidence from the field. Department of Production and Systems University of Minho.

Barclays (2012).UK Hospitality and Leisure Sector outlook Third quarter 2012. Corporate Banking, Barclays Bank PLC.

Businessweek (2012). Compass Group Plc (CPG:London). Bloomberg. UK.

Clarke, P.J. (2002). Account Infor for Managers. Cengage Learning EMEA.

Global Capital Investment
There is some proof that capital through financial globalization may raise the growth rate in developing countries. "Traditionally, fixed exchange rates have been considered to require more reserves than flexible rates. Fluctuations in the balance of payments would be taken care of by compensatory exchange rate adjustments under a flexible regime, whereas they involve temporary swings in reserve holdings under a fixed regime. With flexible rates, fundamental disequilibria would be more promptly corrected, because the correct changes in price signals to exporters and importers would occur more quickly than under fixed rates held constant for too long." (Cline, 1976)

Developing countries that open up their capital markets may also accumulate very high levels of unsustainably debt so it is important that if the money comes they still control the citizens' consumption rates. "For example, there is evidence that international investors do engage in herding and momentum trading in emerging…...

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References

Cline, William R. (1976). International Monetary Reform and the Developing Countries. New York: The Brookings Institution.

IMF. (2000). How Can The Poorest Countries Catch Up? External Publications: Chapter 4 PDF. Retrieved on May 9, 2005, from IMF Web at  http://www.imf.org/external/pubs/ft/weo/2000/01/pdf/chapter4.pdf 

The Old World Bank

 http://www.worldbank.org/

Johnson Controls
Emerging markets are riskier than established ones, and because of that Johnson Controls should make some adjustments to the method by which it evaluates capital investments when dealing in emerging markets. The 2013 Outlook and Strategic Review does not explain how risk is evaluated at Johnson, but the company would normally subject its capital investments to analysis that includes sensitivity analysis, and NPV with sensitivity analysis.

For emerging markets, the hurdle rate would be higher in order to account for the higher degree of risk. China represents over 50% of Johnson's business in Asia, so the company has a significant amount of knowledge about the risk conditions in the Chinese market. Thus, the company can set a hurdle rate that is appropriate to the Chinese market using available information. The company can also estimate the growth rate of China for the coming years, and the risk of inflation. Essentially, taking…...

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Works Cited

Bloomberg. (2013). China's inflation accelerates as chill boosts food prices. Bloomberg News. Retrieved March 1, 2013 from  http://www.bloomberg.com/news/2013-01-11/china-dec-inflation-2-5-exceeding-economists-est-.html 

Saltelli, A., Tarantola, S., Campolongo, F. & Ratto, M. (2004) Sensitivity Analysis in practice: A guide to assessing scientific models. John Wiley & Sons.

Schall, L., Sundem, G. & Geijsbeek, W. (1978). Journal of Finance. Vol. 33 (1) 281-287.

Zhang, C. & Clovis, J. (2010). China inflation dynamics: Persistence and policy regimes. Journal of Policy Modeling. Vol. 32 (3) 373-388.

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 acquisition probably…...

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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.

Furthermore, capital gains normally tend to be spread across a wider income scale than many believe. According to the IRS Individual Income Tax Returns, Preliminary Data, 1992 federal income tax returns, 55% of returns claiming capital gains were from incomes of $50,000 or less, including a capital gain (Thorning, 1995). hat this information appears to come down to is that the capital gains tax affects almost everyone, which happens to affect the economy in general.
Tax Act of 2011

ith some of the huge advantages that have been back loaded, the Tax Relief Act of 2001 displays itself as more of a tax odyssey than what would be considered a tax act. The most positive of those that are called our planners really just provide estate tax repeal which is a 50/50 possibility of essentially being executed. Taxpayers and planners similarly are left with the troublesome query, "hat is the contemporary…...

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Works Cited

Gordon, M. (2209). Stock Market Looks More Like Face of America, Survey Says. The Associated Press Business News, 25.

John Freear and William E. Wetzel, J. (2009). Who Bankrolls High-Tech Entrepreneurs? American Council for Capital Formation Center for Policy Research,, 101.

Michael J. Graetz. (2010). Distributional Analysis of Tax Policy. Discovery and the Capitalist Process, 105-121.

Robert Gillingham, a. J. (2007). The Effect of Marginal Tax Rates on Capital Gains Revenue,. National Tax Journal, 123.

Investment Demand
usinesses experience profit cycles implying that market fluctuations are inevitable in an economy. Market demand plays a crucial role in the profitability of an enterprise and consequently affects the investment trend. A profitable firm is more likely to invest money to improve production facilities or to extend its business into other domains. Investors will analyze the profitability of any undertaking and only if the expected revenue is greater than the cost of capital will they invest in the project. Keynesian theory also states that the Marginal efficiency of Capital is inversely related to investment. "[t]o induce new investment 'the rate of return over cost must exceed the rate of interest'. [Richard C.. Johnsson] For all businesses profit is the ultimate motivation and any new venture is undertaken only if the internal rate of return is above the cost of capital defined by the prevailing rate of interest. Hence we…...

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Bibliography

J. Bradford DeLong, From Investment Demand to the IS Curve: Low Interest Rates," Accessed on June 7th 2004, http://www.j-bradford-delong.net/multimedia/ISLM2.html

Richard C.B. Johnsson, 'The Liquidity-Trap Myth', Accessed on 7th June 2004,  http://www.mises.org/fullstory.asp?control=1226

This would play a role in helping to bring the Czech Republic into the EU in 2004. The effect that this would have on the Prague Stock Exchange is that it would cause it to rise to 1,940. At which point, it would have a severe down trend economy during 2008 and into 2009. The only difference is: that the various reforms and economic policies that the government was using at the time, helped to contribute to mitigating the effects of the slowdown (as the economy would experience a less severe economic contraction of 3.4%). ("Czech Republic")
The price movements of the Slovak equity market in the last 10-15 years

The ratislava Stock Exchange was founded in 1991 and has been in operation since 1993. ("asic Information") Like what occurred in the Czech Republic the Slovak stock market went through two bear markets that would last until 1998 -- 1999. Where,…...

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Bibliography

"Basic Information." Bratislava Stock Exchange. 2010. Web. 24 Apr. 2010

"Czech Republic." State Department. 2009. Web. 24 Apr. 2010

"History of the Exchange." Prague Stock Exchange. 2009. Web. 24 Apr. 2010

But even with no cost savings whatsoever, this project has a positive NPV.
e can see, therefore, that the greatest area of sensitivity is with the terminal value. The terminal value at present is worth $143 million of the NPV. If we break down the variables that go into the terminal value, however, we notice that the cost savings are critical. If SGA expense is not reduced, then the terminal value is reduced to $67 million and the total NPV for the entire project ends up being $98 million. This figure is less sensitive to the change in cost of goods sold.

e should also consider testing combined sensitivity of our shakiest projections. Sales may not live up to expectations and cost savings might not occur. If we assume no net income and no additional cost savings, the project will have an NPV. If we assume that our expectations for these…...

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Works Cited:

No author. (2009). Free Cash Flow. Investopedia. Retrieved May 13, 2009 from  http://www.investopedia.com/terms/f/freecashflow.asp 

Ely, Bert. (2008). Savings and Loan Crisis. Concise Encyclopedia of Economics. Retrieved May 13, 2009 from  http://www.econlib.org/library/Enc/SavingsandLoanCrisis.html 

Damodaran, Aswath. (no date). Closure in Valuation: Estimating Terminal Value. Stern School of Business. Retrieved May 13, 2009 from  http://pages.stern.nyu.edu/~adamodar/pdfiles/eqnotes/dcfstabl.pdf 

Breierova, Lucia & Choudhari, Mark. (1996). An Introduction to Sensitivity Analysis. MIT. Retrieved May 13, 2009 from http://sysdyn.clexchange.org/sdep/Roadmaps/RM8/D-4526-2.pdf

The NPV method is when the company will discount all possible income received from an investment, to where it is in line with their projected minimum rate of return (hurdle rate). At which point, managers will be able to see if the present value will have a positive or negative return for the organization in the future. Those projects that can provide positive present values will more than likely accepted, because they are providing a return that is in line with the company's minimum expectations. As a result, managers can use this method as another way of determining, if a project can meet their minimum objectives. When evaluating different projects, this provides an effective way of comparing the investment with the minimum returns. At which point, managers can see which project would provide the greatest economic benefit to an organization. ("Techniques of Capital udgeting," 2009)
The MIRR is when the…...

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Bibliography

Capital Budgeting Techniques. (n.d.). Retrieved July 13, 2010 from Murray State website: http://campus.murraystate.edu/academic/faculty/larry.guin/FIN330/CapBudTechniques.htm

Techniques of Capital Budgeting. (2009). Retrieved July 13, 2010 from Maps of World website: http://finance.mapsofworld.com/corporate-finance/capital-budgeting/techniques.html

Cooper, W. (2001). Capital Budgeting Models. Retrieved July 13, 2010 from Entrepreneur website:  http://www.entrepreneur.com/tradejournals/article/116186585.html

investment management in the financial sector. The paper highlights the world's present macroeconomic situation. It further details the macro economic situation and the way it affects investment decisions in several investors. In addition, the paper describes a sample investment programme and provides critical decisions to investors as well as investment vehicles used by the investment moguls. The paper summarises practical exercises in compound investment management growth and the use of capital investment.
Investment management is an important part of the global financial sector, which is key in financing vast business empires. Investment management is incorporated under state laws employing several individuals and creating revenue to key players in the financial market. It is the management of several securities and assets to meet specific objectives for the benefit of the investors. The products used known as investment vehicles can be of minimal risks such as government bonds; carry high risks such…...

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References

Development Policies and Anaysis Division. (2012). World Economic Situation and Prospects. Retrieved May Friday, 2012, from www.un.org:  http://www.un.org/en/development/desa/policy/wesp/index.shtml 

B.P.Eregha. (2010). Interest Rate Variation and Investment Determination in Nigeria. International Business Management Journal, 41-46.

Blume, M. (1978). Inflation and Capital Markets. Cambridge: Ballinger.

Contrarian Investor's Journal. (2008, July 6). Effects of inflation on value of investment. Retrieved May Friday, 2012, from www.cij.com: http://cij.inspiriting.com/?p=482#

Private Sector Investment and Economic Development
Investment and economic development

The ole of Private Sector investment in Economic Development

In the past few decades there has been overwhelming support for growth and development rooted in private investments and market-oriented strategies. A move from public sector driven growth has come as result of the need to reduce the widening gap in the balance of payment account, increasing public debt, rising inflation rate, growing foreign debt fundamentally falling living standards. There has been a shift from the need for large public corporations undertaking productive activities in an economy owing to the realized inefficiency in resource allocation. Corruption and misappropriation of public funds is observable owing to the lacking need to optimally reap benefit from the investment. Unlike in the public sector, private sector investment guarantees optimal productive activities, efficient allocation of productive resource, technological advancements to reduce cost and increase productivity (Dao, 2008).

Preferences for private…...

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References

DAO, M.Q. 2008. The Impact of Investment Climate Indicators on Gross Capital Formation in Developing Countries. The Journal of Developing Areas, 42, 155-163.

GROSSMAN, G.M. & HELPMAN, E. 1994. Endogenous innovation in the theory of growth. Journal of Economic Perspectives, 8, 23-44.

HARRISON JR., W., HORNGREN, C.T. & WILLIAM, C.T. 2012. Financial accounting 9th edition., U.S.A., Prentice Hall

JORGENSON, D. 1971. Econometric Studies of Investment Behavior: A Survey. Journal of Economic Literature, 9, 1111.

capital purchase, costing $5,000, company benefit . Examples include a X-ray machine, MI processor, software filing patient records, a research library, large item company . o Identify management goals expenditure support
Capital purchase

The health care field is becoming presented with more and more pressures in today's society. There are numerous changes in the social and economic environments, which become combined to generate new pressures for the health care providers. The life expectancy of the population increases, generating increased needs for medical care for several years. Then, the Baby Boomers are retiring, causing a demanding generation, used to financial resources and access to services, to turn to the medical care sector for more services. The policies regulating the field also change as do the demands and expectations of patients.

In such a context, the health care institutions find themselves in a position in which they have to be better managed and administered.…...

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References:

Brown, M., 1992, Health care information: strategy, structure and process, Jones & Bartlett Learning

Daft, R.L., 2009, Organizational theory and design, 10th edition, Cengage Learning

Finkler, S.A., Ward, D.M., Calabrese, T., 2011, Accounting fundamentals for health care management, 2nd edition, Jones & Bartlett Publishers

2012, Absolute Medical Equipment, last accessed on June 29, 2012http://www.absolutemed.com/Medical-Equipment/MRI-Machines

Principles of Business Essay Topics

Ethics and Social Responsibility

The Importance of Ethical Decision-Making in Business
Sustainability and Corporate Social Responsibility: Balancing Profits and Planetary Health
The Role of Business in Addressing Social Issues
Whistleblower Protection and the Ethical Obligations of Employees

Innovation and Entrepreneurship

The Role of Innovation in Driving Business Growth
The Entrepreneurial Mindset: Characteristics and Erfolgsfaktoren
Creating an Innovative Work Environment
The Impact of Technology on Business Innovation

Leadership and Management

Effective Leadership Styles: Authoritarian, Democratic, and Laissez-faire
Motivating Employees: Theories and Best Practices
The Importance of Diversity and Inclusion in Management
Managing Organizational Change: Challenges and....

Yes, the running cost of a commercial green building can justify the higher initial capital invested in it.

Here are some reasons why:

1. Energy Efficiency: Commercial green buildings are designed to be energy efficient, which means they consume less energy for heating, cooling, and lighting compared to traditional buildings. This results in lower energy bills, reducing the overall running cost of the building.

2. Water Efficiency: Green buildings use water-saving fixtures and technologies, such as low-flow toilets and rainwater harvesting systems. This leads to lower water bills and reduced operational costs.

3. Maintenance Savings: Green buildings typically use high-quality materials and systems....

Justifying the Running Cost Savings of Commercial Green Buildings

The initial capital investment required for a commercial green building can be significantly higher than that of a conventional building. However, the long-term running cost savings associated with green buildings can justify this initial investment. Here's a detailed analysis:

1. Reduced Energy Consumption:

Green buildings incorporate energy-efficient design strategies and technologies, such as:

Improved insulation and sealing
High-performance windows
Efficient lighting systems
Renewable energy sources (e.g., solar panels)

These measures reduce energy consumption and lower utility bills. Studies have shown that green buildings can consume 20-50% less energy than conventional buildings.

2. Lower Water Usage:

Green buildings....

Industrialism has greatly impacted societies and economies in the modern world in several ways 1. Economic growth Industrialism has led to increased production and productivity, which has contributed to economic growth in many countries. The development of industries such as manufacturing, mining, and technology has created jobs and boosted GDP. 2. Urbanization Industrialism has led to mass urbanization as people have migrated from rural areas to cities in search of work in factories and other industrial settings. This has transformed societies by creating densely populated urban areas and new social structures. 3. Wealth disparity The rise of industrialism has also....