budgeting decision in the most government parastatals is statutory instrument
used to take decision in most organization
like NNPC i.e. Nigerian
National Petroleum Industry. This government parastatals helps in exploration
of crude oil and natural gas and refining or processing of crude oil and
natural gas to produce petroleum and produces and others denatures both for
domestic consumption and for export. The expect of the corporations
activities include transportation and distribution petroleum products
throughout Nigeria and production of petrol-chemical to provide the needed raw
material for rapid agricultural and industrial development of the
country. They are also responsible for the supervision of the country
activities of oil companies.
year 1996, most of the oil companies has grown considerably. This is
evident in its size and area of operation, which spanned through one length and
breath of the country.
subsidiaries of government department engaged in activities of capital
budgeting are; (1) Engineering Company of Nigeria (ENCON).
This is a
joint venture enterprise between NNPC and Bethel, An American based multi
national engineering and consulting company.
B. Nigerian Petroleum Development
Company (NPDC): This is petroleum producing company of a group. It
is wholly owned by Ngos. It is involved in exploration and production of
crude oil and gas.
of NNPC is to profitable operate and optimum size petroleum exploration and
development company limited NGDC it is also under the NNPC, its mission is to
efficiently gather treat, transmit and market Nigeria Natural Gas and its
bye-products to major industries and utility gas distribution companies in
Nigeria. The other includes Integrated Data Service Company Limited
OF THE STUDY:
which is an appraisal of capital budgeting in government parastatals, is to find
out how the various appraistatals appraise as capital budgeting
decisions. For every organization, the usefulness of financial statement
enhance decision making. Information provided should be current and
continuing inflation of recent year has led to an increasing awareness of some
of the disadvantage of historical cost accounting. The following problems
associated against the capital budgeting decision in government parastatals.
i. The inability to
provide current information for decision making.
ii. Limitation of capital
evaluation models and appraising investment.
iii. Lack of infrastructure
facilities militate the production and service of organization.
iv. Finally the monitoring/post
auditing of all capital budgeting decision is important. However this is
costly and after ignored in practical.
should under take this activities as it can contribute favourably to the firms
over all returns risk and value.
OF THE STUDY:
objective of the study is to determine how capital budgeting decisions are
undertake by the Nigerian Government Parastatals like NNPC. Its aims is
to find out how investment decision are made, how accurate are the information
presented to management useful in making investment decisions.
tend to find out the particular capital budgeting technique the management of
government parastatals use to evaluate the investments they want to used.
OF THE STUDY:
importance of this research in its usefulness. This study will be
of immense interest to those responsible for apprasing capital budgeting
decision in firms. The study will also be of immense help to accounting
on banking student interested in this area.
It is hoped
that the research findings will be primary importance to the management of the
SCOPE AND LIMITATION:
to find out how government parastatals engage in capital budgeting decisions.
i) How government
organization should engage in making effective decision.
ii) How money will be realized
to finance the firms and investment made.
researcher is limited to the above decision for capital budgeting in government
organization and also the researcher that studying individual subsidiary
companies or organization will generate information for that particular
subsidiary company or organization of government parastatals.
DEFINITION OF TERMS:
Investment: This is an investment that yield returns during future
periods that are relatively for removed from the time of the investment.
Budgeting: This is the process of decreasing resources is project whose
cost and benefits are spread out several time periods.
project: These are real asset and the productive fixed assets of a
Accounting information: This takes the form of financial
reports which are used not only to appraise the past performance of individuals
and groups but also to design and make decision affecting the future.
TERMS AND CONDITIONS APPLY
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