Essay on Income And Expenses : Fundamentals For Financing Projects

1502 Words Oct 3rd, 2016 7 Pages
Income and expenses – the fundamentals to financing projects. Once the source of income has been decided, properly determining and evaluating all necessary expenditures for a proposed project is essential. In order to maintain proper accounting a capital budget is needed. This capital budget, as it is defined by Investopedia is “the process in which a business determines and evaluates potential expenses or investments that are large in nature” (para. 1). The Federal Government must be as responsible and any other organization when it comes to managing finances. The Department operates on a calendar that utilizes a fiscal year in order to properly calculate when, how much, and which expenses are paid. In this, it is important to understand rules and regulations that govern this process. A capital budget is a plan that involves acquiring and spending funds to be paid back over a period of time and includes possible rates of return (Business Dictionary, 2016 and Investopedia, n.d.). Since the Department operates differently from profit based organizations, its acquisition of funds and repayment plans differ from other businesses. For instance, just as any other business must report financial income and expenses, the Department’s actions are regulated by Prompt Payment Act. This act, found in 31 U.S.C. Section 3901 (as cited by Peckinpaugh, 1996), regulates how the Department repays obligations due to contractors or other businesses. Specifically, the act stipulates “payment…

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