quantitative and can be defined over a period of time. Traditional budgeting as offered a lot of contributions in many years. Research shows that it seems it is more unsuitable for the modern business. The objective of this essay is to explain what budgeting is‚ the purpose of budgeting‚ types of budgeting‚ definition of annual budgeting‚ its advantages and disadvantages‚ definition of rolling budgets and it advantages and disadvantages. Budgeting serves a number of useful purposes. These include:
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Capital Budgeting Part I PV= FV / (1+i)^y PV= present value‚ FV= future value‚ i= discount rate‚ and y= time. 1a) If the discount rate is 0%‚ what is the projects net present value? Year Cash Flow Discount Rate Discounted Cash Flow 0 -$400‚000 0% -$400‚000 1 $100‚000 0% $100‚000 2 $120‚000 0% $120‚000 3 $850‚000 0% $850‚000 Answer: The projects net present value is $670‚000 If the discount rate is 2%‚ what is the
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in projects that will maximize the value of the firm. However‚ many analyses should be made before making the decision to invest in determinant projects. The process by which the firm decides which investment is most profitable is called capital budgeting. There are different methods by which a firm can find the economic valuation for a project: net present value (NPV)‚ internal rate of return (IRR) and profitability index (PI). Even though the firm has different evaluation methods to help it decide
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Northern Drilling Problem definition Peter Bremner‚ general manager of Northern Drilling Inc. (Northern)‚ is facing a decision on whether to submit a proposal to Mond Nichkel Company (Mond). If he decides to propose‚ he has to decide the following. 1). Invest equipments (drill‚ skipper/bulldozer‚ etc) or not 2). Offering price 3). How to secure drillers Criteria selection To make a decision about above problem‚ I have set the following criteria. 1). Business expansion strategy 2). Net
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Short Answered Questions: 1. What is the purpose of having foreign key(s) in a relational database table? i. Represent a relationship between tables ii. Foreign key in one table has the same value‚ referencing another table’s primary key iii. Referential integrity 2. What is the purpose of having a primary key in the relational database table? i. Primary key is used as a unique identifier to represent the data in that row. ii. It is also used to provide
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FIN3101 Corporate Finance Practice Questions Topic: Capital Budgeting 1. Marsh Motors has to choose one of two new machines. Machine 1 costs $180‚000‚ has a 3 year life and EBIT of $108‚750 per year. Machine 2 costs $360‚000‚ has a life of 6 years and EBIT of $122‚875 per year. Assume straight line depreciation over the life of the machine. Marsh is a levered firm with a debt equity ratio of 0.40. The beta of equity is 1.125 while the beta of debt is 0.25. The market risk premium is 8 percent
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Budget Budget is the major financial and economic statement. The role of the budget is to keep track of the money coming in and the money going out. It is essential part of running any business effectively. It can help make a short and long term projections about financial situation‚ avert a financial crisis and plan for major financial changes. The company has to be able judge its spending performance. Does not matter what type of company it is‚ the ability to measure performance using budgets
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Capital Budgeting Analysis Project MBA 612 The General Capital Budgeting Process and how it is implemented within Organizations The general capital budgeting process is the tool by which an organization determines its choice of investments through analyzing and evaluating its cash in and out flows. The capital budget process is vital to the organizations mere existence. Capital budgeting decisions can mean the difference between the company’s
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Budgeting consists of defining priorities and needs‚ and receiving and spending funds over a particular period‚ usually a year for school district (Brimley‚ Verstegen & Garfield‚ 2012 (p. 279). The school budget is a financial plan that involves strategic planning‚ receiving funds‚ expenditures and evaluating the results. Education accountability is linked to effective budgeting that establish instructional goals along with financial planning. It is imperative as a school board member to possess
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Sonnet 30 In this sonnet‚ the poet conveys a theme of grief as he meditates on past woes and losses but is ultimately comforted by the thought of a "dear friend" (13). The pensive poet reflects upon memories of the past‚ causing him to regret his failure to achieve all that he wanted. With old woes recalled‚ he grieves over having wasted precious time. He then weeps‚ although he seldom does normally‚ for dear friends who have died and are lost to death’s eternal night. He cries once more over
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