Assignment Content

1. Question 1
2. Question 2
3. Question 3
4. Question 4
5. Question 5

1. 10 Points

Project 2	Year 0	Year 1	Year 2	Year 3
Beginning cash
				Cash Receipts
Savings (revenue)		$25,000	$25,000	$25,000
Investor Proceeds
Other	$10,000			$12,000
Total	$10,000			$37,000
				Cash Payments
Materials	$50,000	$9,000	$9,000	$9,000
other	$4,000	$1,000	$1,000	$1,000
Total investment	$54,000
Net	$(44,000)	$14,000	$14,000	$27000

For the following questions please SHOW YOUR WORK TO RECEIVE CREDIT. You can attach a file to your submission. Excel files using the NPV formula WILL NOT RECEIVE CREDIT.

Given a WACC of 8.7%, the NPV of this project is Blank 1 (4 points). (Module 4 Unit 1&2). The discounted payback period is Blank 2 (2 points). (Module 4 Unit 2)

For the following questions enter either accept or reject into the blank.

Given another project (Project B) that was independent of the above project (Project A) with a NPV of $11,570, what would recommend?

Blank 3 Project A. (1 point).

Blank 4 Project B. (1 point).

Given another project (Project B) that was mutually exclusive with the above project (Project A) with a NPV of $11,570, what would recommend?

Blank 5 Project A. (1 point).

Blank 6 Project B. (1 point).

• Blank 1
• Blank 2
• Blank 3
• Blank 4
• Blank 5
• Blank 6

1. 15 Points

Ratio	Company	Industry averages
Profitability Ratios
Return on Equity	3.9%	13.0%
Return on Captial	2.6%	10.1%
Net Profit Margin	3.9%	11.0%
Operating Profit Margin	5.8%	15.2%
Gross Profit Margin	41.8%	38.20%
Activity Ratios
Total Asset Turnover Ratio	0.69	2.2
Fixed Asset Turnover Ratio	0.85	8.5
Working Capital Ratio	23.34	20
Inventory Turnover Ratio	3.42	6.43
Days of Inventory on Hand	106.73	67.31
Accounts Receivable Collection (days)	26.06	20.03
Accounts Payable Collection (days)	49.28	40.5
Solvency Ratios
Leverage	1.47	3.2
Debt to Equity	0.47	1.1
Times Interest Earned Ratio	1.96	7.8
Current Ratio	1.18	3.82
Quick Ratio	0.46	1.7

Using the above table discuss one area the company is performing well in (3 points) and three areas they are performing poorly in (9 points) based on their financial ratios. (Module 2). What type of funding, debt OR equity (NOT BOTH) should this company consider for its projects? (3 points) (Module 3 Unit 2).

1. 5 Points

Consider the project given to you above in question 1 of this assignment. Explain one risk this type of project might have (2 points). Suggest and explain one mitigation solution for this type of risk (3 points). (Module 5 unit 2).

1. 15 Points

Consider the project given to you above in question 1 of this assignment. Create a work breakdown structure outlining 3 main cost sources and their corresponding activities. Present it in a hierarchy such as the one in the slides for Module 5 Unit 1. (5 points). Explain why each cost is direct or indirect, fixed or variable, and why they belong in the project budget rather than the company budget (10 points). (Module 3 Unit 1).

1. 5 Points

Write a mission statement, strategy, and objective for the following company (3 points). (Module 1 Unit 2)

Company: WareHouse

A furniture company aiming to provide basic furniture essentials to low income members of society. They use recycled or unused materials from higher end furniture companies which helps keep costs low and makes each product slightly different from another.

Discuss how the proposed project aligns with your strategy and/or objective (2 points). (Module 1 Unit 2)

Project:

Designing and launching a website where other furniture stores can arrange to sell them their unused or extra materials.