Essay Capital Budgeting

Essay Capital Budgeting
Capital Budgeting The city engineers presented city council members with two projects that require large capital outlays. However, the economic
downturn makes implementation of both projects impossible with current budget restraints. Therefore, the city council decided to conduct a cost
benefit analysis to determine the most cost effective project. While neither project met all the requirements, data analysis determined that Option B was
the best choice. However, city engineers pushed back stating that both projects are vital to the city. Consequently, it was necessary to consider an
alternative solution. The proposal below provides a detailed explanation of all options including an alternative solution.
Explanation: Option A and...show more content...
The new capital cost for Option A is $–3,580,000.00 and for Option B is $–3,150,000.00. The net present value for Option A with a discount rate of 12
percent, capital cost of $–3,580,000.00, and benefits generated a negative net present value. While Option B with the capital costs $–3,150,000.00, a
discount rate of 12 percent and benefits equaled a net present value of $763,122.00.
Project Justification: Option B While neither option meets all the criteria, Option B is the most cost–effective and efficient option of the two.
Additionally, Option B's higher internal rate of return of nineteen percent provides the best re–investment opportunity for the future. Research shows
that the internal rate of return "is and has been a popular measure of worth for purposes of project evaluation. It defines the return achieved by an
investment (or true cost of a loan) and can often be viewed as a measure of efficiency" (Hartman & Schafrick, 2004, p. 139). Additionally, Option
B has a positive net present value, while Option A has a negative net present value. In addition, the payback period for Option B is five years and
the payback period for Option A is 7.475 years. In addition, the payback period for Option B is outside the city council's 2.75 years requirement. The
long payback period should not disqualify Option B from city council members' decision–making process. Empirical tests show that "the net present
value method is usually a better guide in the
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capital budget 1
Critically reflect on the importance of capital budgeting. Why is this heated subject in many boardrooms? How does capital budgeting promote the
financial health of an organization? How will you use the financial techniques you have learned this week to promote the financial health of your
organization?
A capital budget is very important for a business. It is a heated subject because a decision about capital budgeting can help the business to determine if
the proposed investments or project are worth taking or not. There are two things that a business has to take into consideration when it is making a
capital budget decision. First there are financial decisions that have to be made. Second, there is an investment decision that is also...show more
content...
If the business was to make an investment on a project that was not right or not profitable the smart thing to do would be to not invest in the project
or consider it at all. An investment that does not make any money can be wasteful for the business and make it lose a lot of money in the long run.
That is why it is important for those who make the decision to evaluate all of their alternatives, risks, and returns, etc in order to decide on whether or
not to reject or accept a project that it might have in mind.
As a result, to promote the financial health of any organization one should know the present value of the investment and have a good ideal of how
long that investment will take to mature and give back returns. In order to create a capital budget I have to consider the needs of the organization,
look at the finances, goals, and position that the business is. In doing I could make a decision about the needs of that business. Second, I would have
to collect, compare, analyze, and evaluate the cash and financial statements in order to compare the cost and revenue. It would give me some lead way
into the position of the business when it moves forward to the future. Third, the capital budget would have to be compared to the cash flow, because it
will help me to know how important it is to make the investment only if it increases the financial bottom line and increase the total financial
performance of the business. I can use the

Bourdieu Social Capital Definition
Bourdieu argues that capital is what makes "the games of society" more than just a simple game of chance (Bourdieu 1986: 241). It is the energy that
drives the development of a field through time (Grenfell 2008). Bourdieu does not restrict capital to its economic sense, however; he expands the
concept to other non–economic forms. By this expansion, Bourdieu shed light on other forms of capital which are seen as disinterested and
purposeless (Bourdieu, 1986). According to Bourdieu (1986), the forms of capital are economic capital (money, other financial resources and material
assets), social capital refers to social networks and contacts of the individual, cultural capital is the education and knowledge and the symbolic capital is
the status...show more content...
when it is known and recognised as self–evident". It is the most authoritative capital for an individual (Bourdieu, 1986). It is a source of power such
as social agent's prestige or social honour, etc. (Wolf, 2002). Unlike other forms of capitals, symbolic capital can be gained only through recognition
by others (Bourdieu, 1986). For example, The Epic of Gilgamesh is an epic poem from ancient Mesopotamia. It is often regarded as the first great
work of literature. The latest and most complete version yet found, composed no later than around 600 B.C., was signed by a Babylonian author and
editor who called himself Sin–Leqi–Unninni. Tablet XI of Gilgamesh was first translated into English and published in 1872. The first comprehensive
scholarly translation to be published in English was R. Campbell Thompson's in 1930. In addition, it has been translated into too many languages. Its
Arabic translation was translated by the former President and CEO of Saudi Aramco, Abdullah S. Jum'ah. He obtained the exclusive rights from the
publisher "Penguin" to translate the epic into Arabic. Last year in Dammam, the Cultural and Arts Association organised an event which opened with
the theatre production of the epic and afterwards the translator signed a great many copies of his

Essay on Capital Asset Pricing Model
James D. Lowe
Trident University International
FIN301 – Principles of Finance
Module 3
Case Assignment
Assignment:
1. For each of the scenarios below, explain whether or not it represents a diversifiable or an undiversifiable risk. Please consider the issues from the
viewpoint of investors. Explain your reasoning
a. There's a substantial unexpected increase in inflation.
b. There's a major recession in the U.S.
c. A major lawsuit is filed against one large publicly traded corporation.
2. Use the CAPM to answer the following questions:
a. Find the Expected Rate of Return on the Market Portfolio given that the Expected Rate of Return on Asset "i" is 12%, the Risk–Free Rate is 4%, and
the Beta (b) for Asset "i" is 1.2....show more content...
Diversifiable risk
The entire economy will not be affected; in fact some companies in areas not affected by the lawsuit will benefit as they will be able to fill a void in
the market as the company in question faces legal precedings.
2. Use the CAPM to answer the following questions:
a. Find the Expected Rate of Return on the Market Portfolio given that the Expected Rate of Return on Asset "i" is 12%, the Risk–Free Rate is 4%, and
the Beta (b) for Asset "i" is 1.2.
CAPM (Capital Asset Pricing Model equation is: r A= r f + beta A (r m– r f) risk free rate= r f = 4% beta of stock= beta A= 1.2 return on market
portfolio= r m = to be determined required return on stock r A = 12.00%

Therefore, r m = 10.666% =(12.%–4.%)/1.2+4.%
Answer: return on market portfolio= 10.666%
b. Find the Risk–Free Rate given that the Expected Rate of Return on Asset "j" is 9%, the Expected Return on the Market Portfolio is 10%, and the
Beta (b) for Asset "j" is 0.8.
CAPM (Capital Asset Pricing Model equation is: r A= r f + beta A (r m– r f) risk free rate= r f = beta of stock= beta A= 0.8 return on market
portfolio= r m = 10% required return on stock r A = 9%
Therefore, r f = 5 % =(0.8*10.–9.)/(0.8–1)
Answer: risk free rate= 5 %
c. What do you think the Beta (Гџ) of your portfolio would be if you owned half of all the stocks traded on the major exchanges? Explain.
The beta would be close to 1
This is

Thomas Picketty Capitalism
In Thomas Picketty's book Capital, he questions the ability of capitalism to remain the prevailing economic system in this country. Between 1945–1975
capitalism produced a system were incomes of the masses began to converge. It was a period were almost everyone was to enjoy and reap the benefits
of the capitalistic system. However now that period seems more like an aberration, than a trend. With rates of inequalities rising, and economic growth
slowing, some have wonder whether or not capitalism is doomed. Previous historical examples such as the French Revolution, have shown us that the
masses will not subjugate themselves to a system that they believe is unfair and unequal. Today, capitalism has seemed to reach the tipping point,
where we...show more content...
As we begin to elect more and more left of center politicians, the political mandate will change. Currently, many believe that the government just
serves the agenda of the elite. However if the believes of the people change, so too will the politicians they will elect. The people will begin to
push for higher standards of living, and a close in the inequality gap. The way our new government will tackle this is through redistribution. They
will take private money and fund it into higher minimum wage, public pensions, free higher education, and other programs aimed at giving
everyone a better life. These policies will be funded by the progressive taxes on capital, and income. This seems much more likely than war and
conflict because ultimately what people want is more equality within the system. The best way to achieve this is through democratic practices
such as elections. However this process will not be easy. There are many hurdles to overcome in order to fix the woes of capitalism and implement
these programs. In the Great Depression the United States succeeded in implementing many progressive programs that ultimately helped lead the
country out of the depression and into the Golden Age. However that was at time when the government was much smaller. "In the wake of the
Depression, World War II, and postwar reconstruction, it was reasonable to think that the solution to the problems of capitalism was to expand the
role of the state and increase social spending as much as necessary. Today's choices are necessarily more complex. The state's great leap forward
has already taken place" (Picketty 334). We need new approaches in order to tackle our issue. Today's society is much different than the society FDR
faced in the Great Depression. Incomes were rising, which led to a greater acceptance of tax dollars going to these social

Capital Budget Paper
Integrative Problem and Study Questions Mark Camagong FIN 370 January 20, 2010 Art Philibert Week 4 Assignment Integrative Problem and Study
Questions 1. Why is the capital–budgeting process so important? Capital budgeting decisions involve investments requiring large cash outlays at the
beginning of the life of the project and commit the firm to a particular course of action over a relatively long period of time. As such, they are costly
and difficult to reverse, both because of: (1) their large cost and (2) the fact that they involve fixed assets, which cannot be liquidated easily. 2. Why is
it difficult to find exceptionally profitable projects? It is hard to...show more content...
Only by examining cash flows are we able to correctly analyze the timing of the benefit or cost. Also, we are only interested in these cash flows on
an after tax basis as only those flows are available to the shareholder. The incremental cash flows interest us because, looking at the project from the
point of the company as a whole, the incremental cash flows are the marginal benefits from the project and, as such, are the increased value to the firm
from accepting the project. 10–4. How do sunk cost affect the determination of cash flows associated with an investment proposal? When evaluating a
capital budgeting proposal we are interested in only the incremental after–tax cash flows to the company as a whole. Regardless of the decision made
on the investment at hand, the sunk costs will have already occurred, which means these are not incremental cash flows. Therefore, they are irrelevant.
10–6. What are common reasons for capital rationing? Is capital rationing rational? There are three principal reasons for imposing a capital rationing
constraint. First, the management may feel that market conditions are temporarily adverse. The second reason is a manpower shortage, that is, a
shortage of qualified managers to direct new projects. The final reason involves intangible considerations. Whether or not this is a rational move
depends upon the extent of the rationing. If it is minor and non–continuing,

Who is responsible for our country in the future? Outside the unfortunate choice between Donald Trump or Hillary Clinton, who else will continue to
lead this nation? Children are always seen as the adults of tomorrow. We always hope that the children we raise and teach will improve not only their
lives but the lives of others. A child's comprehension can be affected by everything around them, so we must provide them aneducation and the help
they need to become the America of tomorrow.
Putnam says Social Capital is highly influential in a child's development. Putnam also suggests that states that have a higher social capital, or a
community whose citizens "trust other people, join organizations, volunteer, vote, and socialize with friends–...show more content...
One group of scholars studied family life pertaining towards neighborhoods and particular family as well. Through these studies many psychologists
recognized the change in child abuse. Child abuse would tend to be higher in neighborhoods with low adherence whilst being lower in areas where
citizens were more comfortable with having their children stay with their neighbors or asking the neighbors for help. Another study lead by Desmond
K. Runyan and his associates concerned a group of children who were had a high risk of neglect and abuse from their parents. After a couple of years
87% of the children involved with the study were "suffering from behavioral and emotional problems." The scholars made a prediction that the children
who were not affected had "...the degree to which they and their mothers were enmeshed in a supportive social network, lived in a socially supportive
neighborhood, and attended church regularly.". Overall, there have been many experiments that link social capital and the role of parents with their
kid's life and the development the child goes through growing up. These factors will make a momentous difference in the life of the child thus showing
the importance parents, teachers, leader and government officials have in the future of America. (Putnam

Financial Capital Structure Essays
Contents :
Introduction on Capital Structure
Summary and Evaluation of Articles
Conclusion
References/Bibliography
Introduction On Capital Structure :–
In the field of finance capital structure means a way an organization or firms finances their assets by the way of some mix and match of Equity, Debt or
Hybrid Securities.
The modern thinking on capital structure is based on the Modigliani–Miller theorem given by Franco Modigliani and Merton Miller. The theorem
suggests that in a perfect market the total value of the company remains the same depending upon how is that company financed. This theorem proves
the importance of capital structuring by the firms throughout the globe. There are other reasons as well like bankruptcy...show more content...
The corporate leverages are affected directly and indirectly by country–specific factors. The researches in comparing the different capital structure
around the globe started around past decade or so and [Rajan and Zingales, 1995] did the initial comparison of seven advanced industrialized countries.
They came up with a remarkable discovery that in influencing a firm's capital structure not only firm–specific factors but also country–specific factors
play a vital role. [DemirgГјГ§–Kunt and Maksimovic, 1999] came up with a different concept of comparing capital structure of firms in developed and
developing countries. They suggested that institutional differences between such countries show a huge variation in long–term debt. Latest researches
by [Graham and Harvey, 2001], [Bancel and Mittoo, 2004] and [Brounen, et al., 2006] have suggested that even among developed countries like U.S
and European countries the institutional environment and internal operations influences financial policies and managerial behavior. This article
basically emphasis on direct impact of countries characteristics on leverage. By analyzing 10 developing countries, [Booth, et al., 2001] found that
capital structure in such countries are affected similarly as in developed countries but with a difference in the way leverage is affected by
country–specific factors like GDP growth and capital market development.
The other article relating to capital

Essay on Capital Structure
Introduction
The relationship between capital structure and firm value has been discussed frequently in the literature by different researcher accordingly, in both
theoretical and empirical studies. It has also been discussed that whether the firm has any optimal capital structure that has been adopted by an
individual firm, or whether the proportions of debt usage is completely irrelevant to the individual firm value.
A firm can choose a mix of three modes of financing i.e. issuing shares, borrowing from the market and use of retained earnings. The ratio of this mix
of funds purely depends on the firm and known as optimal capital structure of the firm. This leads to the different capital structure theories. These
theories explain their...show more content...
Limited research work exists on this area, like Booth et al (2001) studied 10 developing countries including Pakistan. However, this study was
confined only to top 100 index companies. Second study by Shah and Hijazi (2004) was an improvement on the first one as it included all
non–financial firms listed on KSE for the period 1997–2001. However, the second study too was basic in nature in terms of its use of pooled
regression model avoiding the fixed effects and random effects models. The purpose of this study is to extend the work of Shah and Hijazi (2004) by
extending the sample period i.e 2001–2006 and including more firms in sample as convenient random selection of samples, using relevant models of
panel data and using more explanatory variables.
This study will further lead to the dynamics of KSE listed firms. Investor trends towards highly leveraged firms and determination whether the optimum
capital structure effects the decision of investor resulting change in the balance sheet of a company.
Objective of the Study
The objective of this study is to check whether the changes in structure of capital has impact on the overall value of the firms, and specifically in
leverage ratio of firms listed in Karachi Stock Exchange (KSE).
Literature Review
This section starts with the theory of irrelevancy of capital structure. Following subsections give the overview of theories that suggest that the capital

Cultural Capital
Whether you may know it or not, we will all possess some type of capital in our lives. Capital is everywhere, and is a wide–ranging idea that is
beneficial to a society and people alike. There are many types of capital; however, Cultural capital and Social capital are two common types of capital
that have been studied by Sociologists for decades. Cultural capital refers to non–economic things like skills and arts, and social capital refers the
benefits of social networks. In my life, I currently possess both cultural and social capital. My cultural capital mostly comes from my education.
After almost 12 years of schooling, I have learned many things, however, my cultural capital does not come from the actual knowledge itself, but
from the skills I have developed by growing up in a public school and in a generally urban city. I have learned skills as a child such as how to read,
write, and speak, which are the most important skills to develop for children. But other than these manifest functions, I have also developed latent
functions such as knowing how to socialize, how to study, and even how to dress. These things were intended for me to learn, however, they were
never exactly taught to me in my years of schooling. If things similar to these were taught in schools, it...show more content...
Ever since middle school, I have been taking advanced classes. Taking these advanced classes classify me, as well as the others in these classes, as
being a capable minded student looking towards college. This puts us in a subculture at our school in which we all share common values of our
education. Taking these advanced classes also shows to others that we are dedicated students to our education, and have benefited us when applying to
college or for jobs. These benefits also extend out to receiving scholarships, as the advanced students are more likely to receive certain scholarships that
other students may not be available

Thesis on Capital Structure
CAPITAL STRUCTURE MANAGEMENT IN NEPAL (A CASE STUDY ON NABIL, NIBL, NEA, NTC & HGICL) Table of Contents:
RecommendationI Viva– Voce SheetII DeclarationIII Acknowledgement IV List of FiguresV List of Tables VI AbbreviationVII CHAPTER I.
INTRODUCTION Pg No. 1. Background of the study 1 2. History of bank 5 3. Growth of industries in Nepal 5 4. Statement of problem7 5. Objectives
of the study8 6. Significance of the...show more content...
Environment encouraging the industrial growth is missing in the picture. The manufacturing sector in Nepal is small contributing 8% of its share to
the total G.D.P. It consists mainly of small industries. Capital goods industries are few in number. Most of the sectors manufacture food even though
the structure is changing. This sector consists of five sub–sectors namely a. Food, Beverage and Tobacco b. Textile and garment c. Chemical d.
Mechanical Engineering e. Electrical and Electronics The production growth has been significant in paper, food, footwear, iron and steel, beverage
and chemical industries. Fund is the most important criteria to operate any kind of business or organization. It can be raised by two sources i.e.
Equity Capital and Debt Capital. These two sources of capital comprise the total capital structure. Capital Structure refers to the composition of all
source and amount of funds collected to use or invest in business. In other words Capital structure refers to the capital and long–term liabilities of
balance sheet. Therefore, it includes shareholder's fund and long term loans. It is different from financial structure as financial structure includes both
long term and short term source of financing while capital structure includes only long term source of financing. Thus, a firm's capital structure is only
a part of its financial structure.

Capitalism Essay
By definition, Capitalism is an economic system controlled chiefly by individuals and private companies instead of by the government. In this system,
individuals and companies own and direct most of the resources used to produce goods and services, including land and other natural resources labor,
and "capital". "Capital" includes factories and equipment and sometimes the money used in businesses (Friedman, 5).
Capitalism stresses private economic decisions. People are free to decide how they will earn and spend their income. Companies may choose which
goods and services to produce and how much to charge for them. They also compete with one another to sell products. Nations whose economies are
based on capitalism include the United...show more content...
But even more than that, we commemorate the birth of Americans as free men. At a single stroke, the Declaration of Independence and its ideas set
America free from England, and set Americans free from their own government. The Founding Fathers instituted America's government to protect the
freedom of its citizens, and to secure their rights to "Life, Liberty and the Pursuit of Happiness."
These rights were created to secure freedom of thought and action for all Americans. Freedom of thought is the freedom of an individual to use his
mind: to educate and inform himself; to make his own judgments; to reach his own conclusions; to set his decisions; to hold his beliefs; to choose the
whole course of his life. Freedom of action is the freedom of an individual to act on his own judgment: to pursue his/her values; to strive for his/her
goals; to work and to keep the product of his/her work; to associate and trade with others; to act for the attainment of his/her inner happiness.
The implementation of individual rights had revolutionary effects. The freedom and progress that followed were unprecedented. Individuals, free from
government interference, pursued their happiness restlessly and produced tremendous amounts of wealth in the process. Individuals took responsibility
for their lives: for their education, their health care, their jobs, their

Capital Structure theories
Capital Structure Theories
Capital Structure
Capital Structure is the proportion of debt, preference and equity capitals in the total financing of the firm's assets. The main objective of financial
management is to maximize the value of the equity shares of the firm. Given this objective, the firm has to choose that financing mix/capital structure
that results in maximizing the wealth of the equity shareholders. Such a capital structure is called as the optimum capital structure. At the optimum
capital structure, the weighted average cost of capital would be the minimum. The capital structure decision influences the value of the firm through its
cost of capital and can affect the share of the earnings that pertain to the equity...show more content...
This approach also says that the overall cost of capital is independent of the degree of leverage.
Features of NOI approach:
1. At all degrees of leverage (debt), the overall capitalization rate would remain constant. For a given level of Earnings before Interest and Taxes
(EBIT), the value of a firm would be equal to EBIT/overall capitalization rate.
2. The value of equity of a firm can be determined by subtracting the value of debt from the total value of the firm. This can be denoted as follows:
Value of Equity = Total value of the firm– Value of debt
3. Cost of equity increases with every increase in debt and the weighted average cost of capital (WACC) remains constant. When the debt content in the
capital structure increases, it increases the risk of the firm as well as its shareholders. To compensate for the higher risk involved in investing in highly
levered company, equity holders naturally expect higher returns which in turn increases the cost of equity capital.
Example:
Let us assume that a firm has an EBIT level of $50,000, cost of debt 10%, the total value of debt $200,000 and the WACC is 12.5%. Let us find out
the total value of the firm and the cost of equity capital (the equity capitalization rate).
Solution:

EBIT

Capital Market Essay
CAPITAL MARKEt
A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long–term funds. It is
defined as a market in which money is provided for periods longer than a year. The capital market includes the stock market (equity securities) and the
bond market (debt). Money markets and capital markets are parts of financial markets. Financial regulators, such as the UK's Financial Services
Authority (FSA) or the U.S. Securities and Exchange Commission (SEC), oversee the capital markets in their designated jurisdictions to ensure that
investors are protected against fraud, among other duties.
Capital markets may be classified as primary markets and secondary markets. In...show more content...
Financial Intermediaries : The fourth important segment of the Indian capital market is the financial intermediaries. This comprises various merchant
banking institutions, mutual funds, leasing finance companies, venture capital companies and other financial institutions.
These are important institutions and segments in the Indian capital market.
Primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions
can obtain funding through the sale of a new stock or bond issue. This is typically done through a syndicate of securities dealers. The process of selling
new issues to investors is called underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission
that is built into the price of the security offering, though it can be found in the prospectus. Primary markets create long term instruments through
which corporate entities borrow from capital market.
Features of primary markets are:
This is the market for new long term equity capital. The primary market is the market where the securities are sold for the first time. Therefore it is
also called the new issue market (NIM).
In a primary issue, the securities are issued by the company directly to investors.
The company receives the money and issues new security certificates to the

Capital One
Capital One Financial Corporation
1. How is Capital One's use of IT different from other mass customization strategies? Capital One uses IT through its information–based strategy (IBS)
to "record, organize, and analyze data on the characteristics and behaviors of their customers," as stated by CEO Richard Fairbank. Their philosophy
was to exploit information by constructing scientific models that could be used to both assess the creditworthiness of potential cardholders through
FICO scoring, and to customize product offerings for existing ones. This was done through data mining, sorting, customizing offers and marketing
campaigns, and then analyzing this data to see what campaigns worked – for what reason and what...show more content...
Behavioral interviews, case interviews, and standardized tests were used to find raw talent without focusing on prior industry or marketing experience.
These four things are what separates Capital One from its competition, and will sustain their competitive advantage in the future.
3. What are the consequences of Capital One's IT strategy for expansion into different segments of the credit card industry, and into other industry's?
The immediate consequences of their expansion strategy proved the efficiency of their statistical modeling to inhibit Capital One from taking any
missteps into industry's that are either saturated or do not allow enough growth in the future. Capital One considered expanding into auto insurance and
auto financing, but fierce competition, low margins, and stringent regulation kept them from pursuing this immediately. (Capital One did recently
acquire Summit Acceptance Corporation – an auto financing company that focused on the sub–prime market). Next they looked at the energy and
telecom industries, but consumer energy usage patterns are available publicly which kept them from exploring this option further. America One was
created which resold blocks of calling time enabling Capital One to gain a foothold in telecom. An ancillary effect of Capital One looking to broaden
its horizons into other industries will promote other companies to review their current IT systems to see where their inefficiencies lie, so they can

Capital Budgeting Essay
Capital Budgeting Introduction Capital budgeting is the process of evaluating and selecting long–term investments that are consistent with the firm's
goal of maximizing owner wealth. A firm using capital budgeting, their goal is to see if there fixed income will cover itself for profit. Fixed incomes
are things such as land, plant and equipment. When a firm using a machine to produce its good or service. They most of the time what the machine to
produce the amount that they paid for the machine and more. The capital expenditure is the outlay of fund that a firm expects to produce and benefit
with in a one year. The Capital Budgeting Process When approaching the problem of trying to the measure capital budgeting. The first step...show more
content...
=53,742 Global Capital Budgeting In the international business world firms also use the Capital budgeting process. When entering in to the
international market there a couple of thing that are measured different. The First thing is the cash outflows and inflows that occur in foreign currently
Companies face long–term and short–term currency risk related to both the invested capital and the cash flows resulting form it. The Second thing is
the foreign investment entail potentially significant political risk. Political risks can be minimized by using both operating and financial strategies.
TECHNOLOGY When discussing capital budgeting, one must include the effects of technology. Technology assessment can support the capital
budgeting process by providing key information for making decisions about capital requests. Technology assessment has been defined as a method for
evaluating the effectiveness of equipment, drugs, and clinical procedures.(e) However, in terms of capital equipment planning, technology assessment
can be defined more broadly as a method of evaluating current and requested capital equipment by considering the results of published clinical
investigations and of physical assessment of the equipment in the decision–making process. Technology assessment provides information for decision
making in three areas. The department's equipment needs. Information about a department's needs might include the

Capital Expenditure Budget
If I was going to prepare a capital expenditure budget request to add a retail pharmacy in the hospital my first choice of two individuals I want on my
team is the manager over the hospital current pharmacy. They would have general knowledge based on the hospital patients what illnesses and
medicines are common to deal with and give us a valuable perspective on costs, space and displays. In our text (Smith, 2014) " The manager of the
hospital pharmacy can control the number of pharmacists and technicians employed relative to patient volume and technicians employed relative to
patient volume and the expense for the management of the pharmacy. All of the factors I mentioned is important with establishing a capital expenditure
budget. The other

Cost Of Capital And Capital Essay
!!!What Is Cost Of Capital? How much will it cost and what will I get from it? These questions often arise about most things in life. Investments are
no different, the __cost of capital__ refers to the debt or equity it will cost to finance an investment. Cost of capital always depends on the method of
financing used. An investment can either be solely financed through equity or debt; mostly it is a combination of both. There are many sources of
capital, such as common stock, bonds, long–term debt, etc. A firms cost of capital is measured by using what is called __Weighted Average Cost of
Capital or WACC__. WACC is the average amount an investor expects to receive from an investment. Investors often use WACC to determine whether
to invest. __Example:__ Company A has the following values: E = 500,000 (Market value of the company 's equity) D = 200,000 (Market value of the
company 's debt) V = 900,000 (Total Market Value of the company) Re = .07 (Cost of Equity) Rd = .03 (Cost of Debt) T= .30 (Tax Rate) __WACC
Formula__ = ((E/V) * Re) + [((D/V) * Rd)*(1–T)] WACC= (($500,000/$900,000)x .07) +[(($200,000/$900,000) x .03) * (1–0.30))] Calculating WACC
can be time consuming and difficult, usually one would have to calculate each component used in the formula. Flotation cost is a part of calculating
cost of capital, lets review exactly what flotation cost is and how to calculate it. !!!Flotation Cost __Flotation Cost__ are all the expenses that a
company will gain when

Essay On Raising Capital
Raising Capital it one of the most important thing in any business. It's useless having a great idea and the right connections if you don't have the
money to get it going. Without capital, your business can't get off the ground. You need it to buy products or materials, pay wages, have a secure cash
flow and generally run your business on a day–to–day basis. The most common types of debt capital are bank loans, personal loans, bonds and credit
card debt. When looking to grow, a company can raise funds by applying for a new loan or opening a line of credit. This type of funding is referred
to as debt capital as it involves borrowing money under a contracted agreement to repay the funds at a later date. With the possible exception of...show
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Entrepreneurship is one of the hardest investments to make because it requires more than just money. Consequently, it is also an ownership investment
with extremely large potential returns. By creating a product or service and selling it to people who want it, entrepreneurs can make huge personal
fortunes. Bill Gates, founder of Microsoft and one of the world's richest men, is a prime example.
1.3Precious Objects
Gold, Da Vinci paintings and a signed Cristiano Ronaldo jumper are all considered as ownership investment – provided that these are objects that are
bought with the intention of reselling them for a profit. Precious metals and collectibles are not necessarily a good investment, but they can be
classified as an investment nonetheless. Like a house, they have a risk of physical depreciation (damage) and require upkeep and storage costs that cut
into eventual profits.
2.Lending Investments
Lending investments allow you to be the bank. They tend to be lower risk than ownership investments and return less as a result. A bond issued by a
company will pay a set amount over a certain period, while during the same period the stock of a company can double or triple in value, paying more
than a bond – or it can lose heavily and go bankrupt, in which case bond holders usually still get their money and the stockholder often gets nothing.
2.1You're Savings Account
Even if you have nothing but a regular savings account, you can call yourself an investor. You are

Essay Capital Budgeting

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Essay Capital Budgeting