Capital Budget Project.
Choose either option 1 or 2
Option 1: Explain the Capital Budgeting process used in your work place. Please note this option requires either personal account or interview with the appropriate people in your work place. You can contact previous employers if you choose.
· How are cash flows determined
· Who is involved in the process
· What computation is most commonly used (ie IRR, NPV, Payback etc)
· What is the follow up process once a project has been approved? (ie. If a buying a new machine that will save money, is there any validation the savings are realized)
Option 2: Evaluate a major financial decision you have made recently or are considering. (ie buy vs lease car, educational degree, buy vs rent apartment)
· Determine cash flows (include all relevant expenses/costs)
· List and explain assumptions
· Compute IRR, NPV, Payback, Discounted Payback to make decision
· Conclusion: What decision did you make and why?
APA format must be followed
Any calculations must be turned in via Excel
Written paper turned in VIA TurnItIn
Use class tools and concepts to support statements and assumptions.
Assignment length should be adequate to cover the topic but no less than 1000 words.