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Essay Available:
Pages:
1 page/≈275 words
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Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
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Topic:

Portfolio Project

Essay Instructions:

Capital Budgeting Case – From the given case information, calculate the firm’s WACC then use the WACC to calculate NPV and evaluate IRR for proposed capital budgeting projects with a capital rationing constraint. After you choose the project(s), recalculate the capital structure based on the assumption that the project(s) are implemented and determine if the new capital structure will signal the investors either positively, negatively, or not at all. Write a business report on your findings. Include an executive summary and appendices if applicable. See rubric for specific graded criteria. Click on the attached document for additional information.

Essay Sample Content Preview:

Portfolio Project
Name
Course
Instructor
Date
Weighted average cost of capital (WACC)
WACC= 7% (0.25) + 19% (0.25) + 20% (0.5) = 0.0175+0.0475+0.1= 16.5%
NPV and IRR for project A and B
Project APVIFYearCash flowat 16.5%PV0($130,000)1($130,000)1$25,000 0.8584$21,460 2$35,000 0.7368$25,788 3$45,000 0.6324$28,458 4$50,000 0.5429$27,145 5$55,000 0.466$25,630 NPV($1,519)IRR16.06%
Project BPVIFYearCash flowat 16.5%PV0($85,000)1($85,000)1$40,000 0.8584$34,336 2$35,000 0.7368$25,788 3$30,000 0.6324$18,972 4$10,000 0.5429$5,429 5$5,000 0.466$2,330 NPV$1,855 IRR17.75%
The decision c...
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