Capital Expenditures Budget On January 1, 2016, the controllerof Omicron Inc. is planning capital expenditures for the years2016â2019. The following interviews helped the controller collectthe necessary information for the capital expenditures budget:Director of Facilities: A construction contract was signed in late2015 for the construction of a new factory building at a contractcost of $10,000,000. The construction is scheduled to begin in 2016and be completed in 2017. Vice President of Manufacturing: Once thenew factory building is finished, we plan to purchase $1.5 millionin equipment in late 2017. I expect that an additional $200,000will be needed early in the following year (2018) to test andinstall the equipment before we can begin production. If salescontinue to grow, I expect we'll need to invest another $1,000,000in equipment in 2019. Chief Operating Officer: We have really beengrowing lately. I wouldn't be surprised if we need to expand thesize of our new factory building in 2019 by at least 35%.Fortunately, we expect inflation to have minimal impact onconstruction costs over the next four years. Additionally, I wouldexpect the cost of the expansion to be proportional to the size ofthe expansion. Director of Information Systems: We need to upgradeour information systems to wireless network technology. It doesn'tmake sense to do this until after the new factory building iscompleted and producing product. During 2018, once the factory isup and running, we should equip the whole facility with wirelesstechnology. I think it would cost us $800,000 today to install thetechnology. However, prices have been dropping by 25% per year, soit should be less expensive at a later date. Chief FinancialOfficer: I am excited about our long-term prospects. My onlyshort-term concern is managing our cash flow while we expend the$4,000,000 of construction costs on the portion of the new factorybuilding scheduled to be completed in 2016. Use this interviewinformation to prepare a capital expenditures budget for OmicronInc. for the years 2016â2019. Enter all amounts as positivenumbers. Omicron Inc. Capital Expenditures Budget For the FourYears Ending December 31, 2016-2019 2016 2017 2018 2019 Building $$ $ Equipment $ Information systems Total
Capital Expenditures Budget On January 1, 2016, the controllerof Omicron Inc. is planning capital expenditures for the years2016â2019. The following interviews helped the controller collectthe necessary information for the capital expenditures budget:Director of Facilities: A construction contract was signed in late2015 for the construction of a new factory building at a contractcost of $10,000,000. The construction is scheduled to begin in 2016and be completed in 2017. Vice President of Manufacturing: Once thenew factory building is finished, we plan to purchase $1.5 millionin equipment in late 2017. I expect that an additional $200,000will be needed early in the following year (2018) to test andinstall the equipment before we can begin production. If salescontinue to grow, I expect we'll need to invest another $1,000,000in equipment in 2019. Chief Operating Officer: We have really beengrowing lately. I wouldn't be surprised if we need to expand thesize of our new factory building in 2019 by at least 35%.Fortunately, we expect inflation to have minimal impact onconstruction costs over the next four years. Additionally, I wouldexpect the cost of the expansion to be proportional to the size ofthe expansion. Director of Information Systems: We need to upgradeour information systems to wireless network technology. It doesn'tmake sense to do this until after the new factory building iscompleted and producing product. During 2018, once the factory isup and running, we should equip the whole facility with wirelesstechnology. I think it would cost us $800,000 today to install thetechnology. However, prices have been dropping by 25% per year, soit should be less expensive at a later date. Chief FinancialOfficer: I am excited about our long-term prospects. My onlyshort-term concern is managing our cash flow while we expend the$4,000,000 of construction costs on the portion of the new factorybuilding scheduled to be completed in 2016. Use this interviewinformation to prepare a capital expenditures budget for OmicronInc. for the years 2016â2019. Enter all amounts as positivenumbers. Omicron Inc. Capital Expenditures Budget For the FourYears Ending December 31, 2016-2019 2016 2017 2018 2019 Building $$ $ Equipment $ Information systems Total
