The decision-making process to upper management

Assignment Help Financial Management
Reference no: EM131068384

Imagine you are a representative of management in the company you have selected for your Week Six assignment (my paper is on CVS pharmacy/retail store) and you must make a capital budgeting decision. The decision is to implement a new computer network system to decrease the time between customer order and delivery. The cost will be 10% of last year’s profits. You are charged with describing the important considerations in the decision-making process to upper management. In your response, be sure to include the following:

A description of the important factors, in addition to quantitative factors, that were considered when making this capital budgeting decision.

An explanation of how these factors are significant to the company.

A summary of how you will determine the criteria to rank capital budgeting decisions and whether some criteria are more important than others.

A calculation of the proposed return on investment based on criteria you select and justification for that ROI.

Reference no: EM131068384

Questions Cloud

Calculate the growth rate : The market capitalization rate for Admiral Motors Company is 9%. Its expected ROE is 15% and its expected EPS is $7. If the firm’s plowback ratio is 40%. Calculate the growth rate. what will be its P/E ratio?
What is the least you could pay to acquire a bill : A Treasury bill has a bid yield of 2.91% and an ask yield of 2.89%. The bill matures in 126 days. Assume a face value of $1,000. What is the least you could pay to acquire a bill?
Capital budgeting and dividend policy : We examined two very important topics in finance this week; Capital Budgeting and Dividend Policy. Critically reflect on the importance of selecting the right projects in which to invest capital. Do we always select those projects that have the highe..
Describe your chosen company dividend policy : Using the annual report of CVS stores and other sources such as a 10k or 10q’s, discuss the dividend policy of your company. How would you describe your chosen company’s dividend policy? Why do you believe this company chose the dividend policy they ..
The decision-making process to upper management : Imagine you are a representative of management in the company you have selected for your Week Six assignment (my paper is on CVS pharmacy/retail store) and you must make a capital budgeting decision. You are charged with describing the important cons..
The firm has total debt with a book value : A firm has current assets that could be sold for their book value of $38 million. The book value of its fixed assets is $76 million, but they could be sold for $106 million today. The firm has total debt with a book value of $56 million, but interest..
What was your total real return on investment : You bought one of Great White Shark Repellant Co.’s 8 percent coupon bonds one year ago for $760. These bonds make annual payments and mature 12 years from now. Suppose you decide to sell your bonds today, when the required return on the bonds is 9 p..
Change in financial position and financial decision : Change in Financial Position. What do you think happens to your budget when your financial position changes? Financial Decision. In the previous question, you decide to pay off the car loan and invest the difference. Now you no longer have a $350 per..
Role of budgeting and personal financing : Role of Budgeting. How does budgeting fit into your financial plan? How is your financial plan affected by your spending? What is the budgeting trade-off? Personal Financing. Describe some advantages and disadvantages of using personal financing to a..

Reviews

Write a Review

Financial Management Questions & Answers

  Accepted a one-year employment term by a firm

You have recently accepted a one-year employment term by a firm. The firm has given you the option of receiving your salary as a lump sum value of $30,000 at the end of the year or as 12 monthly payments of $2,400 starting one month after you start w..

  Least expensive and most expensive

The Johnsons have accumulated a nest egg of $40,000 that they intend to use as a down payment toward the purchase of a new house.  If local mortgage rates are 2.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range o..

  Shareholders are required to compensated for financial risk

Company has an Un levered beta of 1.1. Financed with 50% debt and levered beta of 1.6. If the risk free rate is 5.5% and the market risk premium is 5% how much is the additional premium that shareholders are required to be compensated for financial r..

  Determine which alternative is less costly

A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $80,000 with $1,500 salvage value after 16 years. Determine which alternative is less co..

  What is hastings required return

Hastings Entertainment has a beta of 0.64. If the market return is expected to be 13.80 percent and the risk-free rate is 7.80 percent, what is Hastings’ required return? (Round your answer to 2 decimal places.)

  What number of shares is necessary to ensure your election

If the voting procedure is cumulative, what number of shares is necessary to ensure your election to the board? Is it possible for you to be elected with fewer votes? Explain.

  Calculate the operating cash flows for the new project

Assume that a new project will annually generate revenues of 1,800,000 and cash expenses (including both fixed and variable costs) of 600,000 while increasing depreciation by 190,000 per year. In addition, the firm’s tax rate is 37%. Calculate the op..

  What is its days sales outstanding ratio

All for a dollar had accounts receivable of $4,000,000, accounts payable of $3,700,000, inventories of $9,100,000, annual sales of $51,000,000 and net income of $8,750,000. What is its Days Sales Outstanding ratio to two decimal places?

  Describe the basic elements of a financial accounting

Predict the major potential resulting damage to the company's financial statements from the fraud. Describe the basic elements of a financial accounting information system.

  What is expected return of a share of preferred stock

What is expected return of a share of preferred stock if the current price is $50 and it pays an annual dividend of $5?

  Determining monetary advantage of one investment opportunity

There are several accepted methods of determining the monetary advantage of one investment opportunity over another: The payback method; zero discount rate; net present value; internal rate of return; modified internal rate of return; etc. Discuss on..

  Anagerial accounting-finance is use of cost benefit analysis

A key technique in managerial accounting/finance is the use of “Cost Benefit Analysis” to help management make better business decisions. Define this approach in your own words and discuss 1-2 applications of this concept in the Acquisition/Contracti..

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