A Company Specific Analysis of the Capital Budgeting Process as it Pertains to a Zero Emissions Mandate on the American Automobile Industry
Date of Defense
Finance and Commercial Law
The rapid growth of the U.S. auto industry in the 20th century has led to a fast-paced society that emphasizes the importance of convenience and time-efficiency. Consequently, the cost of this society has been high levels of emissions, causing pollution to the surrounding environment. General Motors' attempt at a solution to the problem is their introduction of the first electric vehicle known as the EV1. The EV1 has the potential to meet society's transportation demands and to create a more pollution-free environment. However, in a free market economy, the price tag for a solution such as GM's may currently be unaffordable. At present, only a portion of the extremely high costs of electric vehicles is borne by the consumer, while the remainder appears to be subsidized by the manufacturer in the form of production cost over-runs. By traditional capital budgeting analysis standards, the immense production cost over runs incurred through introduction tend to necessitate the rejection of the EV project. General Motors' recognition of the flaws inherent in the capital budget, however, possibly allows for the acceptance, and claim of profitability of the project.
Woodcock, Brian M., "A Company Specific Analysis of the Capital Budgeting Process as it Pertains to a Zero Emissions Mandate on the American Automobile Industry" (1997). Honors Theses. 2083.
Honors Thesis-Open Access