Capital Budget Data Analysis Chapter

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River County's Capital Budget

River County Capital Budget

Here at River County we have put together a capital budget because we are planning to make several principal achievements for the next year of business in 2012 because we believe that after further evaluation of the investments we have made in 2010 has helped us determine which items are beneficial to the company and the consumer. What we must ask ourselves at River County is "If we continue to purchase these types of items in the future, will the profit to our corporation be larger that the expenditure of the asset?" We realize that these items do vary; however, we are able to see the positives and negatives of these smaller and larger units by not only calculating the different costs and expected years of the product or asset, but to look at the company's averages, as well.

In reference to the excel spreadsheet that our managers have put together based on last year's cost of expenses, we have looked at two possible assets that are bought to assist our business in the distribution of goods and services as well as construction and maintenance at our facility which was the garbage truck and bull dozer.

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We also have two possible assets that we made a decision to purchase that we bought that are a couple of goods that we currently provide inside our store that was based on sales from last year which are the lawn mowers and activity centers that we advertised and put on the market. As you can see by purchasing the garbage truck and bull dozer, the advantage of these two pricey investments are expected to last at least 10 and 8 years which is a lot more than some of our smaller items that we carry in the store. Even though these two items are a major investment and should be considered carefully, the annual percentage at which these two decline are only at a rate of 20 and 25% which is average according to the calculations. Even after 10 years of owning and operating the garbage truck, the end value of the expense is still….....

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