1) Create your own example of Capital Expenditure From any chosen company.
Describe and provide an approximate value of the initial cash flow.
Describe and provide an approximate value of the annual cash flows.
Provide an estimation of the life of the project, as well as the exit costs.
Here is an example: Purchase of a Replacement Fire Truck: Project Cost = $ 454,700.
Recommendation: Add $ 65,000 per year to the Fire Truck Reserve Trust Fund to fund this and future equipment replacements.
Rationale: Adding a fixed amount per year to cover the replacement schedule of the fire equipment will minimize spikes in the county budget, while allowing the Fire Department to replace equipment on a regular schedule.