NORTHCENTRAL UNIVERSITY
ASSIGNMENT COVER SHEET
Student:
THIS FORM MUST BE COMPLETELY FILLED IN
Follow these procedures: If requested by your instructor, please include an assignment cover
sheet. This will become the
...
NORTHCENTRAL UNIVERSITY
ASSIGNMENT COVER SHEET
Student:
THIS FORM MUST BE COMPLETELY FILLED IN
Follow these procedures: If requested by your instructor, please include an assignment cover
sheet. This will become the first page of your assignment. In addition, your assignment header
should include your last name, first initial, course code, dash, and assignment number. This
should be left justified, with the page number right justified. For example:
DoeJXXX0000-1 1
Save a copy of your assignments: You may need to re-submit an assignment at your instructor’s
request. Make sure you save your files in accessible location.
Academic integrity: All work submitted in each course must be your own original work. This
includes all assignments, exams, term papers, and other projects required by your instructor.
Knowingly submitting another person’s work as your own, without properly citing the source of
the work, is considered plagiarism. This will result in an unsatisfactory grade for the work
submitted or for the entire course. It may also result in academic dismissal from the University.
MBA-5130 Dr. Craig Martin
Managing Business Finances Management of Business Finances
Faculty Use Only
2
MBA-5130-7
MBA-5130
Week 7 Assignment:
Evaluate a Capital Budgeting Case Study
Craig Martin
June 17, 20183
MBA-5130-7
Introduction
This report provides an overview of capital budgeting - determining which investments a firm
should undertake. The net present value (NPV) rule, which widely used in practice, is developed
and illustrated with several examples. Some alternative evaluation techniques including internal
rate of return and payback period are also explained, highlighting potential problems with their
use. The NPV method illustrated in the context of choosing between mutually exclusive projects
and projects with different lifetimes.4
MBA-5130-7
Evaluate a Capital Budgeting Case Study
Essay discussing the meaning and importance of each of these principles as they apply to
capital budgeting:
A capital project is a substantial non-recurring investment that's needed to purchase or
construct a facility or equipment, which necessarily leads to a loss of liquidity. A capital budget
is a legal plan to spend the resources necessary to acquire or create the fixed asset that's the
subject of the capital project, which is aimed to provide to the success of an organization's
strategic plan. A team's management assesses and ranks alternative capital investments using the
capital budgeting process to make optimal investment decisions. The investment proposals
evaluated regarding the profits the project is expected to create, the timing of the forecasted cash
inflows, the potential for a high return on the investment that can be subsequently used to finance
the organization's growth and the significant investments required to support the project. Based
on the ranking of the investment alternatives, the company selects the most desirable projects to
finance.
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