There are four projects (Potential Jobs) and you are tasks with analyzing to see in which order should we fund the projects. Once you calculate each project, you will present a3-4 page double-spaced typed Microsoft Wordanalysis justifying your positions presented as to ranking of each project, and as to acceptance/rejection with justifications as to why you accept or reject. The typed Microsoft Word analysis should utilize APA formatting or MLA. Sources should be properly APA or MLA sourced and the 4 page double-spaced count does not include the title page or references. The analysis should have the following headers: 1) an introduction, 2) facts, 3) outcome and 4) justification.A TYPED MICROSOFT WORD DOCUMENT IS ONLY REQUIRED.The template with the excel work is not required to be submitted.
Attachments:Capital Investment Template-1.xls
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Introduction-This should be a professional introduction as if you are the finance or accountant presenting this presentation to the CEO and other executives for consideration. Your details should discuss the most relevant aspects of Capital Investment decision analysis. Be brief on this section. 2-3 paragraph/10% of points
Facts-This should be an explanation of the potential projects. You can make up what the projects are. For example, you can say Job Z is for a construction project or Job A is for an new investment in a Kitchen oven for our pizza franchise. It is limitless but should make logical sense. 2-3 Paragraph/10% of points
Outcome-This is the section where you provide the results of the analyzation into the model. You should not embellish here but be very factual as to the outcome of the potential jobs returns and feasibility. You should gleam all this from the template data that you inputted. 1 page/20% of points.YOU MUST CALCULATE: Accounting Rate of Return, NPV, payback Period, Internal Rate of Return, and Profitability Index
Justifications-This is the meat… You now have to examine the outcome and use the Accounting Rate of Return, NPV, payback Period, Internal Rate of Return, and Profitability Index and other measures to make an informed analysis of which projects are acceptable and which logical order it should be in. Please note this is not guess work… There is a logical order and there is an acceptance or rejection of each based on the decision elements of time value of money and payback, IRR, ARR, PI, etc… You have to use your newfound knowledge of chapter 24 and the details from the outcome to put a reasonable analyses together. 1.5 pages /60% of points.Capital Investment Analysis Justification Example-1.pdf
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Name (Potential Job): Job T
Purchase Price: $2,960,000
Salvage Value: $0
Recovery Period (3,5,7,15,20 yrs): 7
Asset Life (2-20 yrs): 20
Expensing ($10,000 maximum): $7,000
Income Tax Rate: 20.00%
Percent Financed by Loan: 74.00%
Loan Interest Rate: 4.00%
Loan Length (years): 7
Opportunity Cost: 5.00%
Cash Income: $390,899
Cash Expenses: $1,600
Inflation Rate: 2.00%
Name (Potential Job): Job S
Purchase Price: $1,899,800
Salvage Value: $1,000
Recovery Period (3,5,7,15,20 yrs): 7
Asset Life (2-20 yrs): 20
Expensing ($10,000 maximum): $5,000
Income Tax Rate: 25.00%
Percent Financed by Loan: 69.00%
Loan Interest Rate: 7.00%
Loan Length (years): 5
Opportunity Cost: 5.00%
Cash Income: $589,431
Cash Expenses: $1,600
Inflation Rate: 5.00%
Name (Potential Job): Job K
Purchase Price: $2,184,000
Salvage Value: $5,000
Recovery Period (3,5,7,15,20 yrs): 7
Asset Life (2-20 yrs): 15
Expensing ($10,000 maximum): $7,000
Income Tax Rate: 22.00%
Percent Financed by Loan: 60.00%
Loan Interest Rate: 19.00%
Loan Length (years): 6
Opportunity Cost: 6.00%
Cash Income: $692,524
Cash Expenses: $1,600
Inflation Rate: 4.00%
Name (Potential Job): Job O
Purchase Price: $1,934,000
Salvage Value: $4,000
Recovery Period (3,5,7,15,20 yrs): 7
Asset Life (2-20 yrs): 15
Expensing ($10,000 maximum): $10,000
Income Tax Rate: 26.00%
Percent Financed by Loan: 78.00%
Loan Interest Rate: 8.00%
Loan Length (years): 5
Opportunity Cost: 6.00%
Cash Income: $400,169
Cash Expenses: $1,240
Inflation Rate: 5.00%