Business Management Systems, Inc.

Capital Budgeting Analysis for your long-term projects BMS can help you analyze capital requirements for long term projects aimed at generating future profits or cost-savings for your company. Such projects can require large initial cash outflows for plant an equipment and start-up costs prior to actual production and sale of a new product. Depreciation of purchased equipment versus leasing considerations can generate very different expected net cashflows related to a given project, and, therefore, very different expected net incomes or pre-tax profits. Ownership permits a company to defer tax payments since the real depreciable life of equipment may be longer than accelerated depreciation schedules provided by the government. The difference between real useful life and accelerated depreciation for tax considerations enables a company to defer tax payments and use the money in the interim to earn additional profits. Such analyses enable a company to evaluate different projects or different uses of capital to generate future profits. The most realistically future-profitable projects that best fits a company's goals may be financially analyzed to provide a road map into the future. If your company requires an accurate, realistic capital budgeting analysis that aids the decision-making for future projects, contact BMS.