Some types of capital investments have associated cash flows that are very difficult to estimate, while other types of capital investments have associated cash flows that are very easy to estimate. Name two capital investments from your chosen publicly traded entity, one that has associated cash flows that are easy to estimate and one that has associated cash flows that are difficult to estimate. Explain how these two types of investments differ and why the associated cash flows are easier or more difficult to estimate.
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Write My Essay For MeManagerial Accounting M8 Discussion
Capital investment refers to a company’s purchase of assets that are long term. For instance, real estate, manufacturing plants as well as equipment (Biddle, Callahan, Hong & Knowles, 2016). This task looks at Honda’s capital investments that have associated cash flows that are easy to estimate and one that is not easy to estimate.
One capital investment that has associated cash flow that is easy to estimate are investments in buildings. Honda has been investing in many infrastructural facilities and buildings. In 2018, the company approximated an investment of $ 30 million in Ohio facilities and an estimated $ 85 million in Alabama (Dayton Daily News, 2018). This cash…
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