Multiple Techniques. Most companies use multiple techniques for all of their capital budgeting decisions. There are a number of minor methods, such as profitability index and sensitivity analysis, which can also be employed in making decisions.
Hiring an excavation or land clearing company to clear flat land with light vegetation and few trees might cost $20-$200 per acre; clearing more sloping land with overgrown brush and a few trees might cost $500-$2,000 per acre; and clearing heavily wooded or forested land can cost $3,000-$6,000 or more an acre, depending on conditions and whether the resulting debris will be burned (illegal in many areas and strictly limited in others), stacked in designated spots for later disposal or ...
During 2004, Z paid the contractor $800,000 for general land clearing, grading and filling. He also incurred $500,000 in land preparation costs for modern greens. Z adds the $800,000 to the $10 million basis of the land. He treats $500,000 as part of the cost of the greens, which is eligible for bonus depreciation.