Assignment Instructions/ Description
The GFOA recommends that governments at all levels forecast major revenues and expenditures. The forecast should extend several years into the future. The forecast, along with its underlying assumptions and methodology, should be clearly stated and made available to stakeholders in the budget process. It also should be concisely presented in the final budget documents.• When preparing a forecast some key questions should be considered:• What is the time horizon of the forecast?• What is the objective of the government forecasting policy?• Are there important relationships between variables that could aid in the forecasting?• Are population changes affecting service demands and/or revenues?• Does the revenue (or expenditure) tend to vary with the level of economic activity in the community?
Assume you are charged with establishing the budget for next year. The only revenue comes from proceeds of a municipal parking garage. The garage generated the following revenue in the past:
2013 $ 10,524,186
2014 $ 10,855,482
2015 $ 11,264,822
2016 $ 11,655,191
2017 $ 12,006,956
2018 Projection
The garage has 1,250 spots. There is a flat fee of $10/day. The hours of operations are Monday – Friday 6 am – 11 pm. The manager of the garage feels next year will be a good year projecting a 4% increase. Your financial analyst provided you a report that the buildings in the area are adding staff.
Complete a paper describing the forecasting methods you would use for revenue and expenditure projections. You should describe the method and discuss application of each method. Calculate your revenue projection and explain how it was determined, what method was used and what information was valuable. Since you have no expenditure data just focus on methodology.
Forecasting is essential to accurately predicting revenues and expenditures. Choosing the right method will impact the accuracy of the forecast. You should review at least three methods for expenditures and three methods for revenues. Include in your paper the methods reviewed and how they could be used in your projections. Consider the questions above in your paper.
The paper should be at least 4 pages with a minimum of 3 scholarly sources. APA format required.
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