HSM-543 Week 4 Discussion: Capital Budgeting- Thread 2 - Capital Budgeting (graded)

HSM-543 Week 4 Discussion: Capital Budgeting Week 4 – Thread 1 - Capital Budgeting (graded) Capital budgeting is needed to properly allocate the large dollar amounts for major expansion and equipm ent purchases. The process is often perceived by employees as being very political. What procedures should an organization use to eliminate that perception and to provide for a good, consistent evaluation of capital projects? This section lists options that can be used to view responses. Collapse All Print View Show Options Responses Responses are listed below in the following order: response, author and the date and time the response is posted. Sort by Read/Unread Sort by Response Sorted Ascending, click to sort descending Sort by Author Sort by Date/Time* (an instructor response) Collapse Mark as Unread Mistakes? Professor Nathanson Email this Author7/23/2016 12:19:51 AM Class, what might be an example of mistakes which are made in capital budgeting? Thanks, Craig. Class, what might be an example of mistakes which are made in capital budgeting? Thanks, Craig. Class, what might be an example of mistakes which are made in capital budgeting? Thanks, Craig. Collapse Mark as Unread RE: Mistakes? Margaret Daughtry Email this Author7/24/2016 9:22:15 PM Possible example of mistakes that can be made in capital budgeting is over expenditure of the funds that are available for equipment and such things. (an instructor response) Collapse Mark as Unread RE: Mistakes? Professor Nathanson Email this Author7/26/2016 6:43:14 PM Margaret, I have also seen that when managers overestimate, they receive monthly budgets that are too large. By the end of the month they find they have not spent their allocations. Class, what would you think occurs in this situation? Thanks, Craig. Collapse Mark as Unread RE: Mistakes? Christina McLaughlin Email this Author7/26/2016 8:35:46 PM I would think that it doesn't make the manager look good, make them look like they didn't know how to figure their budget in the first place Collapse Mark as Unread RE: Mistakes? Margaret Daughtry Email this Author7/27/2016 9:02:25 AM I agree with Christina, that if the manager overestimates what is needed for the project he is making a fool of himself and should learn to do his job better or ask for help if he is not to proud to do so. Collapse Mark as Unread RE: Mistakes? Neil McCann Email this Author 7/27/2016 9:10:13 PM Yes, I have seen this with the Pentagon. The generals and staff are like spoiled children that never have to count their dollars and cents. Often times when they get the numbers they will say they don't like them come back with better numbers. Many of the agencies rush to spend what they have left in their coffers because if they leave monies in their accounts budgets will cut the next cycle. This is counter productive because every quarter they ask for more and more. Many times what they order is just over head supplies that they already have. When I worked there they would always start ordering helicopter blades and truck tires with whatever they had left. The government does nothing to real in spending and it is so difficult to cut the budgets without organizations like the OMB to enforce it. The only way to stop the cycle is to wait for people to retire and not rehire. Many times non productivity is rewarded. When I was a contractor one guy had his office and he would play on the computer and talk with family all week and then on Fridays his big job was to collect time sheets. This took him about 20 minutes then he went back to his routine.