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Describe a capital budgeting project that might be undertaken by the company that you have selected.

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  1. Description of Proposed Capital Budgeting Project – Describe a capital budgeting project (i.e., an investment in fixed assets) that might be undertaken by the company that you have selected. Make sure that the project has an initial investment in Year 0, followed by a series of annual cash flows for at least seven (7) years. In addition, determine the discount rate, or hurdle rate, that is appropriate for this project and explain the determination of that rate.

 

  1. Explanation of the Excel Capital Budgeting Model – Develop your own Excel spreadsheet model that can be used to determine the Net Present Value (NPV), Internal Rate of Return (IRR), Modified Internal Rate of Return (MIRR), and Profitability Index (PI). Explain how the model is constructed and the required inputs. Discuss the outputs of the model.

 

  1. Explanation and Interpretation of Capital Budgeting Criteria – Prepare a written analysis of the results including NPV,IRR, MIRR, PI, and Profitability Analysis.

 

  1. Recommendation About Implementation of Capital Budgeting Project – Develop and defend a recommendation about whether the proposed project should be implemented or not.