Ultimately, the assignment is to devise a possible capital budgeting project. The expectation is that the project occurs in the future and not that you are reporting on a transaction that already took place an can be any company.

The student is responsible to think of a possible capital budgeting project; collect relevant data; research relevant information regarding implementation of the project; and perform the necessary analysis to evaluate the financial feasibility of the project.

EXCEL ANALYSIS

Students should, at a minimum, consider the following when working in Excel:

Initial cash flows, operating cash flows, and terminal cash flow. Organize your data similar to the case at the end of chapter 12 of the textbook.

Compute Payback; IRR; NPV; NPV profile.

Conduct a Sensitivity/Scenario analysis.

Demonstrate an understanding of how the project will be financed. Understand that debt and interest expenses are generally not included in the analysis Your results should be presented graphically as well. A minimum of the NPV profile should be presented.

WRITTEN MEMO

The memorandum should contain the following four sections:

Contain an introduction.

Provide any necessary explanations and background to understand the project.

Summarize the results that are included in the appendix (Excel Worksheet). The writer should reference key financial concepts in the memo including:

Initial cash flows, operating cash flows, and terminal cash flow

Payback; IRR; NPV; NPV profile

Sensitivity/Scenario analysis

Financing

Provide some type of concluding comments.

The actual computations and or explanation of the computations should be in the attached Excel spreadsheet.

The memorandum should be written assuming that the reader understands the material in this course. When you write, you will share the specific details and results associated with the project; you should not be explaining financial concepts.