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Essay Available:
Pages:
3 pages/β‰ˆ825 words
Sources:
3 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 14.04
Topic:

Capital Budgeting with Funding Sources: Wells Fargo

Essay Instructions:

This SLP has two parts.

Part I

Every company has capital projects. The company you have selected must need something! Be it a new wing to the building, a new product line to be funded, a new piece of equipment, find one new acquisition your company needs.

Once you have identified the new possible investment item, what problems are you going to have in estimating the cash flow that might be emanating from the initial investment and problems in getting it funded? Issues might be:

  • Risk
  • Cost
  • Politics (getting it through committees)
  • Public Relations
  • etc.,

Identify a potential capital project for your company describe such a project and write a short summary of the problems you see in getting the funding to see it through.

Part II

Examine the structure and activities in your organization and identify two projects or events that required an investment. One should be a 'current project' and the other long-term investment project.

For each project or event, identify the preferable source of funding. You may not have access to the actual source of funding so limit your paper to the source YOU feel is most appropriate. Then explain why you feel that source is most appropriate.

 This is a Signature Assignment Expectation for FIN301 Module 4 SLP

There are 2 specific learning outcomes: 1) apply business theories, models, and concepts to guide analysis of problems and situations and 2) utilize data driven analysis in making business decisions.

In this SLP assignment for Module 4 our emphasis will be on understanding the preferable source of funding. You will be summarizing all of what you learned the in the Cases, SLPs and TDs.

Essay Sample Content Preview:

Capital Budgeting With Funding Sources
Name
Institution
Date
Capital Budgeting with Funding Sources
Well Fargo and company is an international banking and finance company and it is the second largest bank in the US. The company was established in 1852 by Henry Well and William Fargo with a basic vision to satisfy customers financial needs and help customers be successful financially (Kuhlemeyer, 2010). In 2016, Wells Fargo was ranked seventh by the Forbes magazine to be among the largest public companies in the world. Wells Fargo is ranked among the 20 most admired companies in the world. In 2015, the company received a credit rating of AA reflecting the highest credit rating (Kuhlemeyer, 2010). Wells Fargo operates with five primary values these are to gain competitive advantage, maintain good work ethics, do what is right for customers, promote diversity and inclusion and promote good leadership (Kuhlemeyer, 2010).
Capital expenditure
Every business organizations have to incur capital expenditure for the business to grow ,in the three months ended in march 2017 ,Wells Fargo capital expenditure for the twelve months was at $ 24million .The cash flow for capital expenditure are the money generate after deducting what the company has spent on acquiring or upgrading physical assets like property or equipment (Kuhlemeyer, 2010). Even though Wells Fargo had a slow year for capital expenditure last year the company is optimistic that the carrier capex and service revenue will pick up within the following year. In the new plan the company is planning to increase investment in technology and e-commerce activities to $ 5 billion up from last year $ 3 billion the company anticipates that wireless spending will increase in 2017. (Muheki et al, 2015)Wells Fargo will spend more to upgrade their networks by next year as compared to 2016 but it is difficult to predict the exact among of additional cash flow is likely to earn by spending on the current capital expenditure plan (Muheki et al,2015).
Funding of the capital expenditure
The company anticipates spending to accelerate this year with funding which will be used to for the tower segment. According to the solvency ratio of the company it is determined to borrow 60 percent of its shareholder fund to finance the capital needs because levels of debt is high, the profitability of the company w...
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