Create your own hypothetical capital budgeting project

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Reference no: EM132024309

Create your own hypothetical capital budgeting project.

Make up a company (it could be real or fictional) and make up/describe a potential project for that company (you should be able to do this in one or two sentences…don’t worry about extreme detail).

1. Create a cash flow stream for this project (the cash flow stream should be between 4-7 years in length), a critical acceptance level (T), and a required return (k). (Hint: Your cash flows must exceed your initial investment and your critical acceptance level must be less than the length of the project).

2. Calculate the PP, IRR, and NPV for your project

3. For each decision technique, identify whether or not that technique suggests you should accept or reject the project

Overall, identify whether or not you should accept or reject the project and why. Note that part D is asking for 3 answers (one for each decision technique) while E is just asking for one answer – what is your final recommendation. Also, why doesn’t need to be a long answer, just a few words.

Reference no: EM132024309

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