1st Edition

Strategic Finance for Criminal Justice Organizations

    292 Pages 32 B/W Illustrations
    by Routledge

    292 Pages
    by Routledge

    Traditionally, the study of financial decision making in law enforcement and criminal justice entities has been approached from the perspective of tax revenues and budgeting that focus only on the past and present. Capital investments of cash flow provide future benefits to all organizations, and among courses in business administration, these notions of long-term financial management are critical to a sound understanding of organizational finance. Strategic Finance for Criminal Justice Organizations examines capital budgeting techniques from a quantitative perspective that targets the strategic future of revenues within the criminal justice and law enforcement sectors.

    Explaining capital budgeting concepts through the use of practical examples, this volume discusses:

    • Economics and the use of money as a tool to facilitate the exchange of goods and services
    • Human decision making, impediments to rendering objective decisions, and methods for improving decision objectivity
    • The consequences of making capital budgeting decisions, the concept of risk, and the time value of money
    • The rendering of decisions using the payback time method and the mathematical formula necessary to use it
    • The concept of discounting and decision rules for net present value
    • How to make an internal rate of return financial decision
    • The mathematical formula for the profitability ratio/index method and using it to make financial decisions

    In all organizations, it is essential that financial decisions are made through informed insight considering all relevant factors. This volume contributes to improvements of the skills that are required to robustly render beneficial, long-term strategic decisions within the law enforcement and criminal justice environment.

    Introductory Concepts
    The Concept of Money
    Formative US Transactions
    Nineteenth-Century US Transactions
    Contemporary US Transactions
    Considerations of the Money Concept
    Categorization of Decisions
    Chronological and Risk Aspects of Decisions
    An Integrative Perspective
    Models and Simulations
    Black Market Decisions
    Legal Market Decisions
    Integrative Observations
    Capital Budgeting Concepts
    Concepts of Decisions
    Objective Decisions
    Impeding Factors
    Group Decisions: Cardinality and Groupthink
    Bounded Rationality and Satisficing
    Stress
    Decision Style and Capacity
    Risk
    Countering Impediments
    Group Dynamics
    Brainstorming
    Nominal Group Technique
    Delphi Technique
    Groupware
    Systems Approach
    Neural Networks
    Scenario and Sensitivity Analysis
    Integrative Perspective
    Financial Management Decisions
    The Attributes of Financial Relationships
    Methods of Financing Organizations
    Bond Debt
    Stock Equity
    Loans and Credit
    Taxation
    Grant Funding
    Goodwill and Charitable Funds
    Insurance Policies
    Confiscation, Seizure, and Forfeiture of Assets
    Value-Added Concepts
    Contexts of Prisoner Labor
    Contexts of Work-Release Programs
    Contexts of Recidivism
    Integrative Financial Management
    Tools of the Trade: Making a Decision
    The Time Value of Money
    Concepts of Future Value and Present Value
    Future Value
    Present Value
    Considerations of Rate
    Determining the Rate Variable
    Determining the Time Variable
    Comments Regarding the Time Value of Money
    Foundational Understanding
    Capital Budgeting Methods
    It Is Time for Payback: The Payback Time Method
    Payback Time Method
    Application of the Payback Time Method
    Single Investment Initiative
    Mutually Exclusive Investment Initiatives
    Multiple Capital Investment Initiatives
    Discounted Payback Method
    A Present for the Present: The Net Present Value Method
    Net Present Value (NPV) Method
    Application of the NPV Method
    Multiple Capital Investment Initiatives
    Accepting Multiple Initiatives
    Advanced NPV Considerations
    How Do We Rate? With the Internal Rate of Return
    Internal Rate of Return (IRR) Method
    Application of the IRR Method
    Accepting Multiple Initiatives
    Advanced IRR Considerations
    Chapter Comments and Summary
    Red or Black? The Profitability Index Method
    Profitability Index (PI) Method
    Application of the PI Method
    Accepting Multiple Initiatives
    Advanced PI Considerations
    Putting It All Together! Let’s Make a Decision
    Accepting Multiple Initiatives
    Advanced Capital Budgeting Considerations
    Chapter Comments and Summary
    Day and Night Shifts: Integrating the Concepts
    Benefit–Cost Ratio Concepts
    Leasing versus Purchasing Concepts
    Scenario Analysis Concepts
    Sensitivity Analysis Concepts
    Break-Even Analysis Concepts
    Complements, Not Competitors
    The Slammer: Concluding Remarks
    Afterword
    Appendices
    Index

    Biography

    Daniel Adrian Doss

    "The book satisfies the academic need to introduce theory while providing relevant real-world application. It provides a logical progression through the world of organizational financial decision-making, and is geared to the non-finance major. It also provides insight into strategic best practices and is adaptable to audiences at the local, regional, and international levels."
    —Ernest C. Fields, Ph.D., in Journal of International Students