Instructions: Read through the capital budgeting scenario provided below. Then review, analyze, and write a report that covers:

a$.$ The economic viability of the proposal, use THREE capital budgeting methods: NPV$,$ IRR, and simple payback methods.

b$.$ Identify at least $3$ risks attendant with your chosen proposed investment idea.

c$.$ Based on the CFO$$s own criteria, should the project be approved?

For the scenario, assume spending occurs on day $1$ of each year and benefit or annual savings occurs on day $365.$ Also assume the discount or interest rate for all scenarios is $10\%.$ Ignore taxes and depreciation.

Assume the CFO has set a max of $2$ years for approval using the simple payback method, and a $17\%$ hurdle rate when using the IRR method; using the net present value method, NPV$,$ projects must have NPV$>0$ to receive approval.

SCENARIO: A company wants to invest in a new advertising program. Using $3$ capital budgeting methods, make a determination about the economic viability of the proposal using the following information:

$1.$ The new advertising program will increase current sales of $$10$ million by $20\%.$

$2.$ The profit margin is currently $5\%$ of sales and will remain so under the new advertising program.

$3.$ The new advertising program will have a $3-$year impact.

$4.$ The new advertising program will cost the company $$200,000$ in the first year only.