Investment Impact - Operations Expenditures

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ccea_analysis

• August 14, 2012 21:20

Hi, I am currently working on an analysis assessing the economic impact of an investment in a particular start-up company. The investment will be divided 3 ways (for which I have specific numbers): construction, capital expenditures (equipment, vehicles, etc), and what has been called operating capital. The first two I have no problem modeling in IMPLAN. The operating capital, however, I am having a hard time figuring out. The only information I have is that operating capital is divided two ways: cash-on-hand (a sort of working capital) and contingency capital - with investment $ values for each. Assuming that labor income will NOT be a part of this operating capital, how might I go about modeling it? My plan was to use an Industry Spending Pattern activity (for the $ amount in operating capital), while normalizing the coefficients to one. This seems somewhat justifiable, but I would really appreciate any feedback. Thanks!

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  ScottL

  • August 14, 2012 21:44

  If the operating capital is to be used for production expenses, that is to produce the products for the start-up, then the industry spending pattern would make sense. Normalizing it to sum to one is correct as well.

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