Valuation and management of flow of internally generated revenue and federal government monetary allocations

Abstract

This paper examines the valuation and management of inflows of internally generated revenue and monetary allocations from the federal government (FG) to a state government (SG). The SG decides to invest part of the internally generated revenue and monetary allocations into a cash account and a stock in order to make more money for the state. The aim of the study is to determine the value of total wealth (i.e., the value of wealth from the investment and cash inflows) that will accrued to the SG over a period of time. The present and terminal values of the SG total revenue was obtained. It was found that investment of the internally generated revenue into stocks and cash account should be encourage to enhance maximum revenue for infrastructural development of the state.