Data collection for capital expenditure project proposals: a case study.

Abstract

Company investment procedures are -frequently analyzed to ensure that there is no better way to meet established goals (Dean, 1954; Wellington, 1963). These goals are usually to maximize the return on asset investment or achieve a desired growth rate in earnings per share. Much has been written about these processes, but the analysis usually begins at the point where all pertinent information regarding the proposal has been gathered (Petty, 1975). This thesis investigates how this information is gathered. The research method was field research of three local organizations. This thesis has four major conclusions. First, that vendor information is extensively used and in the case of the Corporate Farm, heavily relied on for cost data. Second, that historical information in the form of past contracts, sales receipts and rental agreements, are at a minimum used as a point of reference for cost data estimation in all cases. Third, that the industry provides cost data either in the form of written cost estimating guides (in the case of construction) and by direct exchanges of information between organizations (in all other cases). Finally, that there is a high variance of procedures of data collection among the companies interviewed.