Define how principles of capital budgeting can be used

Assignment Help Accounting Basics
Reference no: EM132234960

Assignment 2-Applying Decision-Making Skills

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 10-12 slide presentation in PowerPoint format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M4_A2.ppt.

Reference no: EM132234960

What is the economic order quantity

Sweet Scent Company manufactures scented wax pellets. The company buys wax in 100-pound containers that cost $15 each. They use 20,000 containers per year, and usage occurs

Convergence of us gaap and ifrs

Once the convergence of US GAAP and IFRS has been completed, should US companies restatement their financials for a better comparsion for prior years? Why/why not?

Shortcomings of the official unemployment rate

Some Keynesian economists criticize the official unemployment statistics for understating the extent of joblessness in the United States. Which of the following statements r

Price of the bonds as issue date

Target Company issues bonds with a par value of $950,000 on their stated issue date. The bonds mature in 15 years and pay 10% annual interest in semiannual payments. On the

Potential drawbacks associated with variance analysis

Discuss the potential drawbacks associated with variance analysis. How are managerial accountants and managers able to overcome these challenges? What considerations need

Calculate the total manufacturing cost

Calculate the total manufacturing cost and the cost per unit for the month of August. Assume instead that Baja Industries applies manufacturing overhead on the basis of $40.0

Different possible interpretations of the concept

Discuss different possible interpretations of the concept of a group, and how these may relate to differences in styles of corporate governance and of company financing.

Christy general hospital, a not for profit organization

Christy General Hospital, a not for profit organization, accounts for its activities using a General Fund ( GF), and three restricted fund groups, Specific Purpose Funds ( S

Reviews

Write a Review

 
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