Which one do you think should have the lowest

Reference no: EM131569666

Module- Case: PRESENT VALUE

Assignment Overview

Part II: Read the following three sample business plans:

Ice Dreams
R J Wagner & Associates Realty
Interstate Travel Center

Which of these three projects do you think should have the highest risk from the point of view of investors (potential providers of funds) and would therefore be evaluated using the highest discount rate? Which one do you think should have the lowest? Write a paper explaining your reasoning.

In your assessment of the business plans consider the possible risk of each plan. Risk is one of the main considerations when deciding whether a plan should be evaluated and discounted to present value using a high or a low discount rate.

Note: you are not expected to fully analyze the numbers and financial statements in these business plans. There are only forecasts and projections. Nobody really believes them anyway. Use your intuition rather than calculations to assess risk and potential of each of these plans.
Assignment Expectations

Turn in both Part I and Part II in one Word document when completed. Part I should be two pages long and contain your calculations. Part II should be two pages long.

Reference no: EM131569666

Questions Cloud

Determine the payment to amortize the debt : Find the unpaid balance on the debt. Determine the payment to amortize the debt.

What is the speed of the particle : What is the speed of the particle at (a)x = 3.5 m and (b)x = 6.5 m? What is the position of the turning point on (c) the right side and (d) the left side

Explain why the reclassification adjustments are necessary : Briefly discuss how a transfer of securities from the available-for-sale category to the trading category affects stockholders' equity and income

How often should these be reviewed : Management should re-evaluate these controls periodically. How often should these be reviewed

Which one do you think should have the lowest : Which of these three projects do you think should have the highest risk? Which one do you think should have the lowest? Write a paper explaining your reasoning.

Prepare the form 1041 : Please prepare the 2016 Form 1041 and any other form or schedule required for the Smith Children's Trust. This Return will be due on or before class June 15

How much jewelry is produced in any given period : Exercise (Evaluating a Special Order) Imperial Jewelers is considering a special order for 20 handcrafted gold bracelets to be given as gifts to members.

Ricardian model benefit the import and export of products : How does the Ricardian Model benefit the import and export of products from given countries?

Do you expect price of shares in one year to be much higher : Do you expect the price of the shares in one year to be much higher? Or lower? Or only a little bit higher? How risky the stock is.

User Account

All Pages