Develop a comprehensive analysis using npv

Assignment Help Managerial Accounting
Reference no: EM13331132

As a manager, part of your role is to develop strategy, and share this strategy with various stakeholders within the organization. This assignment will allow you to take your findings as a manager and communicate these findings to those who are affected.

Your company has been presented with a decision on replacing a piece of equipment for a new computerized version that promotes efficiency for the upcoming year. As manager you will need to decide whether or not the purchase of the new equipment is a worthwhile investment and to communicate your recommendations to Executive Management for a final decision. To be convincing, sufficient support for your recommendations must be provided in order to be considered valid and accepted.

Existing Equipment
Original Cost 60,000
Present Book Value 30,000
Annual Cash Operating Costs 145,000
Current Market Value 15,000
Market Value in Ten Years 0
Remaining useful Life 10 years
Replacement Equipment
Cost 600,000
Annual Cash Operating Costs 50,000
Market Value in Ten Years 0
Useful Life 10 years
Other Information
Cost of Capital 10%
Payback requirement 6 years

In this assignment, use the information above to develop a comprehensive analysis using NPV, Payback Method, and IRR to develop a recommendation on replacing the existing equipment with a new computerized version. Develop an executive summary of your findings in a Microsoft PowerPoint presentation format to present to Executive Management.

Do the following in your presentation:

  • Include a statement of the problem or topic, a concise analysis of the findings, and a recapitulation of any main conclusions or recommendations.
  • Be sure to incorporate specific details to highlight or support the summary including calculations.
  • Using your knowledge of capital budgeting techniques, explain how principles of capital budgeting, such as the payback method, IRR, and NPV, can be used to assess the potential projects and assist in the decision-making process.

Reference no: EM13331132

Questions Cloud

Evaluate the acid dissociation constant ka : Calculate the acid dissociation constant Ka, for the ammonium ion (NH^4+); Kb for NH3 is 1.8 x 10^-5
What is the effective annual rate : If a credit card company charges 3% each month on the unpaid balance, compounded monthly, what is the effective annual rate?
Determine the recoil speed of the rifle : A rifle with a weight of 25 N fires a 4.0-g bullet with a speed of 240 m/s. Find the recoil speed of the rifle
What is the pressure kpa is increased in volume : What is the pressure (mmHg) if 800 kPa is increased in volume from 1.75L to 3.0L and the temperature is increased from 65degrees Celsius to 100degrees Celsius
Develop a comprehensive analysis using npv : Develop a comprehensive analysis using NPV, Payback Method, and IRR to develop a recommendation on replacing the existing equipment with a new computerized version.
Explain reaction is initiated : The following reaction is initiated and the concentrations are measured after ten minutes: A(g) + 3 B(g) AB3(g); Kc = 1.33 x 10-2 [A] = 1.78 M [B] = 2.21 M [AB3] = 1.19 M Is the reaction in equilibrium
Which group functions can be used on date values : If the "greater than" comparison operator is used with a multiple-row subquery, what type of result will be returned?
Explain co is introduced into a flask at 600°c : The equilibrium constant for the following gas phase reaction is 0.50 at 600°C. A mixture of HCHO, H2, and CO is introduced into a flask at 600°C.
Find some terms of trade that would make it at least one : If the two spoke, could they find some terms of trade that would make it at least one better off without making the other worse off? How?

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd