ABSTRACT
Capitalized cost calculations are required by municipalities, cities, counties, state and federal government agencies, and may be used by private owners whenever there is a project being proposed and an agency or owner needs to determine an equivalent present worth so that the agency or owner is able to determine the amount to finance when obtaining funding for a project. Government agencies fund projects through appropriations voted on by the legislature or citizens or they sell bonds to the public that pay interest or are redeemable for a higher value at the end of the term of the bond issue. Private owners secure financing by borrowing from banks or other institutions that finance private projects. If a firm has enough capital, they may fund their own projects, but most managers of firms prefer to use the capital of others rather than risk the capital of their firm. There are many types of financing schemes in the public and private sector for funding projects and some of them were mentioned in Section 1.6.
