BUS 254- Midterm Exam Guide - Comprehensive Notes for the exam ( 70 pages long!)

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 254
• Professor: Masood Kamlani

Document Summary

Process in capital budgeting: at least once a year, 1. Project proposals are requested from dpts, plants, authorized personnel: 2. Proposals = examined by a capital budget committee who submit their findings to officers of the company: 3. Officers determine which projects are worthy of funding & submit this list to bod: 4. Bod approve the capital budget for the year. Involvement of top management & bod in the process shows how important the decisions are: big projects require very effective cost controls & good relationship w/a wide variety of. Increased operating costs: overhaul of equipment, typical cash inflows, sale of old equip. Increased cash received from customers: reduced cash outflows for operating costs, salvage value of equipment when project is complete. Ig(cid:374)o(cid:396)es the p(cid:396)oje(cid:272)t"s e(cid:454)pe(cid:272)ted p(cid:396)ofita(cid:271)ilit(cid:455) afte(cid:396) the pa(cid:455)(cid:271)a(cid:272)k pe(cid:396)iod. Ignores the time value of : general format and example: Net annual cash flow cumulative net cash outflow.