According to the text "A budget quantifies future financial plans and budgeting is the process of planning, in financial terms, the organization's activities and the results of those activities" (Marshall 2004).
Other expenditures, like the money spent on fuel, expensive clothes, restaurants, knick-knacks, etc are considered to be of the secondary importance, because people can easily survive without such things. Moreover, if one’s budget is limited, he should not waste it on the unnecessary things. In order to reduce expenditures on fuel, gas one can use public transport and even influence the environment better. Moreover, much money is spent on entertainment. People enjoy going to the cinemas, theaters, etc and all these wastes of money are not always necessary, because one can watch the film at home or see the concert in the Internet. Correct budgeting is the factor, which enables one save money and then use it for the development of the firm and other useful purposes.
The relevance of this controversy lies in that the criticisms of neoclassical theory raised by Cambridge (UK) concern both the theoretical illegitimacy of measuring ‘capital’ as a single magnitude in value terms to determine prices and distribution, and the foundational premise underlying the dom...
ABZ Company wants to start a new product line. It is a retail company, and it wants to start cooking food items focusing mostly on lunch and dinner. The new section will be incorporated under its fresh foods and baked goods products. To fund the new investment, the company will depend on the owners. ABZ is a family owned company and the members share from the company’s profits. All members will contribute towards implementing the new project. In addition, the owners have decided to retain the profits of the past six months to ensure that the funds needed for the project will be available.
The company is bound to face many challenges as it seeks to secure the funds to see the project to completion. Funds may be a problem and not all the members might be in agreement concerning the project. This will mean that some members may choose not to participate in the project, and this will result to a shortage of funds. The members opposed to the project will not want to have their share of the profits committed towards the project. The company will have to look for other sources in order to compensate for the lost funds. This may involve using creditors such as banks, to assist in providing the adequate funds and it will prolong the time taken to start the project.
There are many logistics and legalities involved and the company has to ensure that it is acting within the law. This will cost the company as it has to pay the required fees to the local authority and get the necessary licenses. The company has embarked on a risky venture. The food and beverage industry in the country is competitive as there are many fast food places, hotels, and restaurants available. The company will have to invest in advertising and public relations in an effort to convince people to buy from them and not from their competitors. It will depend on the reputation it has of delivering fresh farm produce and baked goods to enable it expand its market on the food section. .
Overhead costs are likely to increase because of the new project. The project will use some of the resources in the retail store and this will increase the cost of utilities. The company will realize various opportunity costs because of undertaking the project. The owners gave up their cash when they decided to use the profits to start the project. The working capital will change if the company decides to use creditors to source some of its funds since they will increase the available capital. Changes in the working capital will also occur because of the additional inventories that will be required to support the project. Accounts receivables will increase with increases in sales.
There are different risks to consider in capital budgeting. Project standing alone risk is not appropriate for capital budgeting process. It does not consider the fact that most of the risk associated with the project will be diversified as it merges with other projects. The other form of risk involves the amount of risk that the new project will contribute to the entire company. Although it overcomes the limits of the previous risk, it does not consider the effects that the diversified risks will have on the company’s shareholders. Systematic risk is the shareholders perspective of the risk. This form of risk considers the fact that some of the risk will be diversified as the shareholders merge the stock of the new risk with the existing risk. Investors will often consider the rate of return of their investment. An increase in the risk of the project will result to an upward adjustment of the rate of return.
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Capital budgeting is closely connected with the finance of a company and reflects all the finance paid in the form of investment. Capital budgeting includes many things. First of all, the government often invests enormous sums of money into a corporation, if it requires some production or services offered by it. For example, if a city needs public transport, the government invests money into the company which manufactures buses or railway transport and the company has to fulfill this order on time and expect other investments in future if it manages to cope with the work successfully.
A free sample term paper on capital budgeting which can be easily found in the web is one of the best pieces of advice for students who want to learn how to make a correct structure and format the paper well.
Besides, there are other types of capital budgeting. When something terrible has happened and the company experiences considerable loss, the government and other companies may invest capital to restore the condition of the company or the whole area. The most common example can be illustrated on the consequences of the natural disaster. when there is an earthquake and the industry of the city is damaged, a range of organizations can invest great sums of money to rebuilt everything. Then, generally investment is required for special projects and concepts of the company, which are considered to be very effective and useful and the company has no possibilities to bring them into life without without donations and investment.
The process of term paper writing is definitely a problematic one, because it requires knowledge and well-developed writing skills. With the proper assistance of the Internet and a free example term paper on budgeting one will be able to understand the idea of the professional paper writing.
If one wants to present a successful budgeting term paper, he should devote much time to the writing process and collect enough data for the research which will explain the topic from all sides. A good term paper includes interesting and up-to-date informative data, strict logical structure and high-quality analysis of the topic. A student should explain the term budgeting, analyze its principles and the main components, and factors which influence this process. In the end one can share his ideas concerning the methods of the proper budgeting, which can help people manage their finance wisely.
Nearly every project which has made the life of the humanity better has been fulfilled due to capital budgeting. Evidently, if the inventors and scientists had not been invested money for research, the humanity would have forgotten about high technologies long ago. Students who study business and management should be aware of the principles of the capital budgeting, or how to control the invested capital wisely, so they are asked to prepare good term papers of capital budgeting.
In an approximately 500-word response, address the following issues/questions: Many businesses around the world still fail because their capital investment decisions are based upon a calculation on the back of an envelope and do not take any of the correct factors into account. Even larger businesses often get this wrong. This is a true sign of poor resource management. Do you agree or disagree? Discuss the alternative methods of investment appraisal and describe the limitations of these to help justify your arguments. How do you think that capital budgeting decisions should ideally be made by different types of organisations? Important details The professor has a very unique style, the paper cannot be over 550 words. This word count does not include headings and references. Every question needs to be a header, with the answer below. So the headings for this would be as follows (Three in total). Do you agree or disagree? What are some of the alternative methods of investment appraisal? How do you think that capital budgeting decisions should ideally be made by different types of organizations? The 550 words has to be equally distributed between the three questions. The main answer to each question must be highlighted. Will require at least 3 Harvard style references from well known sources. Do you want your assignment written by the best essay experts? Then look no further. Our team of experienced writers are on standby to deliver to you a quality written paper as per your specified instructions. Order Now, and enjoy an amazing discount!