Explain how principles of capital budgeting

Assignment Help Financial Accounting
Reference no: EM13487022

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.

Develop a 10 slide presentation in PowerPoint format. Apply APA standards to citation of sources.

Reference no: EM13487022

Questions Cloud

Upon entering piaget stage of concrete operations : 1.Upon entering Piaget's stage of concrete operations, children begin to master several concepts dealing with problem solving. Discuss these tasks, why they are important and give an example of explain.
Explain can the phase state be changed : IF the temperature remains constant but the pressure is changed, can the phase state be changed. Why or why not.
How much heat flows into or out of the gas : A cylinder contains 4.0 moles of a monatomic gas at an initial temperature of 27 ?C. The gas is compressed by doing 580J of work on it, How much heat flows into or out of the gas
Prepare an annual budget for ballarat furniture company : This is a group-assignment. Each group needs to have 2 to 3 members in it. Please organise yourselves into groups.
Explain how principles of capital budgeting : Develop a comprehensive analysis using NPV, Payback Method, and IRR to develop a recommendation on replacing the existing equipment with a new computerized version.
Determine the emf of the battery : a 90 ohm resistor has a current of .6A and is connect in series with a 150 ohm resistor. What is the emf of the battery to which the resistors are connected
Explain constitutional isomer of dimethylcyclohexane : Write a line angle formula of each constitutional isomer of dimethylcyclohexane. Write the IUPAC name of each isomer.
Explain the ph of solution of butylammonium chloride : The butylammonium ion, C4H9NH3^(+), has a Ka of 2.3x10^(-11) C4H9NH3^(+) + H2O > H3O^(+) + C4H9NH2 A. Calculate Kb for the conjugate base, C4H9NH2 B. What is the pH of a 0.015M solution of butylammonium chloride
Compute the original speeds of the two cars : The first car has twice the mass of a second car, but only half as much kinetic energy. When both cars increase their speed by 10m/s, What were the original speeds of the two cars

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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