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- Title
Capital Expenditure Analysis: An Incident Process Case.
- Authors
Spiller Jr., Earl A.
- Abstract
ABSTRACT: This paper describes an incident process case which has been used effectively as a teaching medium for a capital expenditure decision. Typically, capital budgeting problems require students only to classify data given to them as relevant or irrelevant and to manipulate data to reach an accept or reject decision. In the incident process case, however, students must (1) decide what information might be relevant, (2) present formal and informal requests to the instructor for specific data, and (3) develop these data into useful information. The decision context is the replacement of a company airplane. The case comes from a real-world situation, and the data set reflects current economic conditions. The problem encompasses relevant concepts of capital expenditure analysis and cost-volume-profit analysis. It also employs the distinction between investment and financing decisions. The unstructured setting and requirements require careful and creative thinking by students. The article contains a statement of the case, a basic data set, and a description of how the author conducts the case.
- Subjects
CAPITAL investments; CAPITAL -- Accounting; ACCOUNTING education; EMPLOYEE benefits; CREATIVE ability; COMPANY automobiles
- Publication
Accounting Review, 1981, Vol 56, Issue 1, p158
- ISSN
0001-4826
- Publication type
Article