What are the long- term implications of capital expenditures? How does capital budgeting relate to municipal...

What are the long- term implications of capital expenditures?
How does capital budgeting relate to municipal strategic goals?
With all the environmental, social, political, and cultural changes, is it feasible to budget for the long- term in the public sector? Why? Why not?

Solutions

Expert Solution

Long term implication of capital expenditure will be leading to continuous cash inflows for the longer period of time and higher value addition to the company if the expenditures have been made in the right direction and it can also make the company lose the market share if it is made in the wrong direction.

Capital budgeting will be helping the municipal operation in order to achieve the strategic goal by allocating towards the development of various projects and it will be helping in continuous generation of wealth for the municipal corporation

Yes, it is still feasible to budget for the long-term in the public sector because it will be budgeted after a certain amount of various risk which are present in the external environment which will be related to social environmental and other macro factors and it can still provide the scope for maximization of rate of return has been done after proper forecasting and there has been a proper focus upon the deviations with the actual. So budgeting will be helping in maximization of the rate of return by forecasting of various expenses and income in advance.

jeff jeffy answered 1 year ago

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