NOTE:For this project you must submit documents supporting your answers in the submission section - showing step-by-step how you reached your answers. You can use excel to find the IRRonly. Everything else must be shown as a calculation.

Module 4 Assignment

You, as the project manager, have been asked to recommend which project your company should move forward with. Your company has a total of $350,000 in debt at 5% interest and $400,000 in equity at 12% rate of return.

Project 1is to build a medium-sized garage for a client over three years. The client will pay $10,000 as a deposit immediately, $40,000 the year after and $85,000 in the final year. Your company has a small loan of $10,000 with 5% interest to go towards this project that must be paid back in the end. $50,000 of materials will be bought all at once in the first year. As well as a piece of equipment that requires a $10,500 down payment and yearly payments of $1500 following. Labor for the project is $15,000 immediately and $6000 per year after. Administration costs including taxes are $4000 for set upand $1000 per year after.

Project 2is the purchase and installation of a new piece of equipment for your company with a life span of 3 years. The equipment costs $50,000 up front and $9,000 to run in the following years. You have the same sources of funding (loan and investor's equity) and administration costs as project 1. The equipment will save your company $25,000 beginning the year after installation and has a salvage value of $12,000 at the end of its lifespan.

1. Question Organize a cashflow forecast for each project beginning at time 0. Make sure to include the net income for each year.

Project 1	Year 0	Year 1	Year 2
Beginning cash

Cash Receipts

Client Payments	$Blank 1	$Blank 2	$Blank 3
Investor Proceeds
Other	$Blank 4
Total	$Blank 5	$Blank 6	$Blank 7

Cash Payments

Materials	$Blank 8
Down and monthly payments for equipment	$Blank 9	$Blank 10	$Blank 11
Labor Salary	$Blank 12	$Blank 13	$Blank 14
other	$Blank 15	$Blank 16	$Blank 17
Total	$Blank 18	$Blank 19	$Blank 20
Net	$Blank 21	$Blank 22	$Blank 23

Project 2	Year 0	Year 1	Year 2	Year 3
Beginning cash

Cash Receipts

Savings (revenue)		$Blank 24	$Blank 25	$Blank 26
Investor Proceeds
Other	$Blank 27			$Blank 28
Total	$Blank 29			$Blank 30

Cash Payments

Materials	$Blank 31	$Blank 32	$Blank 33	$Blank 34
other	$Blank 35	$Blank 36	$Blank 37	$Blank 38
Total investment	$Blank 39
Net	$Blank 40	$Blank 41	$Blank 42	$Blank 43

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