Apply payback period and discounted cash flow

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Reference no: EM132767270

Implement several projects for the next year.

Select a possible hypothetical project which has a life span of six years and you are required to forecast units of manufacturing or any other value generated unit, sales price per unit, variable cost per unit and fixed cost. You as the Management Accountant need to incorporate the risk to the project and estimate the cost of capital considering all the risk associated with the particular project. When incorporating the risk to the cost of capital calculation, student should provide reasonable justification for the same.

In addition to that you are required to assume depreciation rate (apply straight line method), tax rate and eventually need to calculate the following;

(a) Earnings Before Interest and Tax (EBIT) and Operating Cash Flow (OCF) for life span of the project.

(b) Apply payback period and Discounted Cash Flow (DCF) methods (NPV, IRR) to evaluate the project.

(d) What environmental, sustainability and other qualitative factors need to be considered by the organization before and during the implementation of the project.

Reference no: EM132767270

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