Economic analysis of asset replacements, Microeconomics

Assignment Help:

An important aspect of municipal finance involves capital budgeting and resource allocation.  In some cases, resource allocations involve expenditures that are not directly revenue generating such as road improvements, maintaining park (green space) areas or constructing sidewalks, etc. In these cases, the decision to expend resources often depends upon engineering reports or quality of life arguments. For example the consideration of outlays for roads would be preceded by municipal engineers evaluating each road as to whether it was below the town's standards and any recommended plan of action detailing construction parameters and costs.  Performing a rigorous cost-benefit analysis in these situations is difficult as the benefits are often intangible, indirect, or difficult to measure.  Thus, while sidewalks may be a desirable project to undertake, the incremental effect on property values and thelikelihood of subsequent increase in property tax revenues are difficult to quantify.

In contrast, some municipal expenditures can have direct revenue effects due to their impact on efficiency; either in the reduction of costs and/or in the collection of revenue. Capital expenditures of this type are of special interest to municipalities who own and operatetheir  utilities.  In the current case, we will examine an asset replacement project using data from a municipal water company, owned and operated by the Town of Lakewood Village. The goal of our case is to perform an economic analysis of the merits of the program and evaluate the financial implications of the decision.


Related Discussions:- Economic analysis of asset replacements

Demand and supply, identify which curve (demand or supply) will be affected...

identify which curve (demand or supply) will be affected?

Derive the linear demand and supply, Suppose that the short-run world deman...

Suppose that the short-run world demand and supply elasticities for crude oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short -run equilibrium

Secondhand smoke globally kills more than 600, Secondhand smoke globally ki...

Secondhand smoke globally kills more than 600,000 people each year, accounting for 1 percent of all deaths worldwide, according to a new study. . . . Researchers estimated th

Is it possible for a firm to be price taker and price maker, Is it possible...

Is it possible for a firm to be both Price taker and price maker?  A firm can either be a price taker or a price maker. It cannot be price maker and price taker at the similar

Exchange rate system, EXCHANGE RATE SYSTEM: It is interesting to look ...

EXCHANGE RATE SYSTEM: It is interesting to look at a case study of a country like India for several reasons: first it is a small country in terms of imports and exports as a p

The production possibilities frontier (ppf), The Production Possibilities F...

The Production Possibilities Frontier (PPF) The PPF curve exhibits the probable combinations of goods and services accessible to an economy, given that all productive resources

Risk Curves, Does the curve represent if the risk is NOT taken and the line...

Does the curve represent if the risk is NOT taken and the line connecting two points on the curve represents if the risk IS taken?

What is neoliberalism, Neoliberalism So much thinking about the proper ...

Neoliberalism So much thinking about the proper role of government in economic growth over the past 2 decades has tends to conclusions which are today known as neo-liberal. The

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd