Part 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?
Need both parts completed in full. Will be submitted via turnit. Calculations need to be completed in Excel and submitted. Assignment length minimum 1200 words.