Chapter 21 - Information for capital expenditure decisions. In this chapter you will learn: Capital expenditure decisions, the capital expenditure approval process, techniques for analysing capital expenditure projects, other issues in capital expenditure analysis, income taxes and capital expenditure analysis, investments in advanced technologies, post-completion audits, the limitations of capital expenditure analysis.
Chapter 16: Capital expenditure decisions. After completing this chapter, you should be able to: Use the net-present-value method and the internal-rate-of-return method to evaluate an investment proposal; compare the net-present-value and internal-rate-of-return methods, and state the assumptions underlying each method; use both the total-cost approach and the incremental-cost approach to evaluate an investment proposal;...
Lecture Management accounting: An Australian perspective - Chapter 20 introduce the capital expenditure decisions. This chapter include objectives: The capital expenditure approval process, techniques for analysing capital expenditure proposals, discounted cash flow analysis,...
In this chapter, the learning objectives are: Explain the strategic role of capital-investment analysis, describe how accountants can add value to the capital- budgeting process, provide a general model for determining relevant cash flows associated with capital-expenditure projects, apply discounted cash flow (DCF) decision models for capital-budgeting purposes,…
After completing this chapter, students will be able to: Determine the cost of plant assets, distinguish between capital expenditures and revenue expenditures, compute depreciation by the straight-line and declining-balance methods, account for depreciation using methods other than straight-line or declining-balance, account for the disposal of plant assets,...
Chapter 5 - Project evaluation: Principles and methods. This chapter explain the importance of each of the steps in the capital expenditure process, outline the decision rules for each of the main methods of project evaluation, explain the advantages and disadvantages of the main project evaluation methods,...
Break-even point: Điểm hòa vốn Business entity concept: Nguyên tắc doanh nghiệp là một thực thể Business purchase: Mua lại doanh nghiệp Calls in arrear: Vốn gọi trả sau Capital: Vốn Authorized capital: Vốn điều lệ Called-up capital: Vốn đã gọi Capital expenditure: Chi phí đầu tư Invested capital: Vốn đầu tư Issued capital: Vốn phát hành Uncalled capital: Vốn chưa gọi Working capital: Vốn lưu động (hoạt động) Capital redemption reserve: Quỹ dự trữ bồi hoàn vốn cổ phần Carriage: Chi phí vận chuyển a...
1. Break-even point: Điểm hòa vốn
2. Business entity concept: Nguyên tắc doanh nghiệp là một thực thể
3. Business purchase: Mua lại doanh nghiệp
4. Calls in arrear: Vốn gọi trả sau
5. Capital: Vốn
6. Authorized capital: Vốn điều lệ
7. Called-up capital: Vốn đã gọi
8. Capital expenditure: Chi phí đầu tư
9. Invested capital: Vốn đầu tư
10. Issued capital: Vốn phát hành
188 Understanding the Numbers
Capital Expenditure Budget (26) The capital expenditure budget is one of the components of the financial budget. Each of the components has its own unique contribution to make toward the effective planning and control of business operations. Some components, however, are particularly crucial in the effective management of businesses, such as the cash and capital expenditure budgets. Capital budgeting is the process of identifying, evaluating, planning, and financing an organization’s major investment projects.
CORPORATE FINANCING AND THE SIX LESSONS OF MARKET EFFICIENCY
Up to this point we have concentrated almost exclusively on the left-hand side of the balance sheet the firm’s capital expenditure decision. Now we move to the right-hand side and to the problems involved in financing the capital
The aim of this text is to explain the meaning and use of
the principal accountancy statements,models and activities
in business life.
The word ‘statements’ includes balance sheets, profit and
loss accounts, cash flow statements and budget reports.
The word ‘models’is used to mean the exercises of costing,
cash flow forecasting, capital expenditure appraising and
other modelling which is essential for sound business
The word ‘activities’covers the topics of accounting systems
and controls, record keeping (book keeping) and the
operation of the budget process.
PLANNING CAPITAL EXPENDITURE.
Steven P. Feinstein.
A beer company is considering building a new brewery. An airline is deciding whether to add f lights to its schedule. An engineer at a high-tech company has designed a new microchip and hopes to encourage the company to manufacture and sell it. A small college contemplates buying a new photocopy machine. A nonprofit museum is toying with the idea of installing an education center for children. Newlyweds dream of buying a house. A retailer considers building a Web site and selling on the Internet.
ESSENTIALS OF FINANCIAL ANALYSIS 71.1.1 Sources of Funding for Capital Expenditures 71.1.2 The Time Value of Money 71.1.3 Discounted Cash Flow and Interest Calculations INVESTMENT DECISIONS 71.2.1 Allocation of Capital Funds
71.2.2 2143 71.2.3 2143 2144 2144 2148 2148 71.3
Classification of Alternatives Analysis Period
Business models have become the primary tools for the financial analysis of nearly all
major business decisions. However, the structure and design of most models have evolved
without reference to an effective business-modelling methodology. In writing this book we
hope to provide the terms of reference for best-practice business modelling.
While there has been an increase in development assistance for health in
general, this aid is volatile — often driven by proﬁts and politics. Donor
governments are susceptible to the political agendas of their parliaments, plac-
ing a focus on short term results. Sustained health development does not ﬁt
Part of the solution lies in the harmonization or pooling of funds, focused
around a single country plan, that is ﬂexible and includes funding for both
recurrent and capital expenditures.
The special handling of troubled assets is not uncommon in the day-to-day activities
of the banking world. For example, non-performing corporate loans are typically
transferred to a work-out department.
In the case of large loan amounts, the individual
lenders form creditor pools in order to prevent coordination failures and a sudden
withdrawal of lenders that can force a financially distressed firm into bankruptcy.
past, work-outs have often resulted in loans being converted into share capital.
The $200 million AUM fund described earlier could therefore base its annual revenue projections
around its $3 million management fee (i.e., 1.5% of AUM) and set its expense caps accordingly. Dur-
ing a strong-performing year the fund will run with a surplus which, like other businesses, it can use for
capital expenditures, incentive bonuses, cash reserves and so forth.
A start-up fund can apply the same principal based on realistic AUM assumptions. (For most funds, “re-
alistic” start-up capital consists of investments by partners, friends and family.
The most important thing is to make sure you record each expenditure when
you make it, keeping a receipt, if possible.
You can do your bookkeeping with a pencil and a little blue notebook, but it’s
much easier if you do it with a computer. There are lots of simple accounting
programmes. Bookkeeping programmes, such as Quicken, are not expensive,
are easy to use and allow you to post expenditure according to budget categories
and generates a range of different reports.
The easiest way to record overall results is to use a spreadsheet programme like
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to the shortage of copper cable....