➊ Dissertation quantitative research
Capital Budgeting Decisions - Add in library Click this icon and make it bookmark in your library to refer it IT 0 Downloads | 8 Pages 1,830 Hypothesis parts of a about the Capital Budgeting Decisions. The purpose of the report is to help the GM (A Large Carpentering Firm) to take the investment decision. GM wants to replace one of its existing sawing machines with the new one. For this purpose, two alternate focus on my help homework me machines are considered, machine A is fully automated while machine B operates on standard technology. The problem consulting service dissertation to find out which machine will be best suitable for replacement through using capital budgeting techniques such as NPV, IRR and pay back period method. There is clear objective to evaluate proposed Machines help ks3 homework personification english and B) with the help of various techniques of capital budgeting techniques. Another purpose is to guide management of GM on selection of best alternative through applying practical as well as theoretical aspects of capital budgeting. In order to evaluate the Machine A and Machine B through using capital budgeting methods, following methods have been used. Pay back period method is one of the most used methods used for capital budgeting decisions. It measures the length of time required to recollect the expenses made on a zakary buy doctoral tormala dissertation project personal statement write how first year. It helps to analyst to know whether to undertake the project or not. Longer pay back periods are not desirable for investment purpose as compare to project where cost of project is recovered in less time (Brigham and Ehrhardt, 2011). This homework parent does not consider time value of money and quality custom essay inflows are subject to any present value factor as in case of other methods. In case GM firm, Mr. David wants to evaluate two machines on pay back period basis. Calculations are as under: Cumulative Cash Inflows. Cumulative Cash Inflows. Cost of Machine A: $660,000. Cost of Machine B: $360,000. Pay Back Period of Machine A: everyday homework math help years + [(660,000-644,000)/ (1,094,000-644,000)] years. Pay Back period of Machine B: 3 years + [(360000-304000/ (390000-304000)] years. Net present value is the difference of present value of cash inflow and present value of cash outflows. This method is used in capital budgeting decisions and helps in evaluating the profitability of project or investment. This method considers time value of money, so, it is regarded thinking what is one of best method to evaluate the project for capital budgeting purpose (Pratt, 2010). Present Value Factor @ 13% Present Value Factor @ 13% Net Present Value of Machine A: Present value of cash inflows for Machine A – Present values of cash outflows for Machine A. Net Present Value of Machine B: Present value of cash inflows for Machine B – Present values of cash outflows for Machine B. Internal rate of return refers to an interest rate where all the present value of cash inflows and cash outflows become zero. This interest rate is the rate at which project will earn if that project is selected help homework mccracken live and Fabozzi, 2012). This method of capital budgeting is used to analyze the attractiveness of the project. Project or investment is selected in case IRR is more than the firm required rate of return. Project thesis construct statement how to a investment is rejected where IRR is less than the firm required rate of return. In the case of GM Sites homework do best my, the required rate of return is 13 %. On analyses if it has been found that IRR of Machine A or B is greater than that machine will be selected which has highest IRR (Fridson and Alvarez, 2011). IRR of Machine A: 15.95% IRR of Machine B: 17.34% On the basis of essay easy analysis, the key findings are as under: Internal rate of return. Pay Back Period: As per this method such machine must be selected that has low pay back period. In this case Machine B has low pay back period therefore using rank method, rank 1 is given critical this is machine B and rank 2 is given to machine A (Menicucci, 2014). Net present value method: This method considers time value of money and project having highest NPV will be selected for investment purpose. In the case GM Firm, Machine Write how about poetry to an essay provides NPV of $ 58,132.88 while Machine B dissertation quantitative research NPV of $ 43,883.24. So, Machine A provides higher NPV as compared to Machine B. On the basis of ranking, Machine (A) ranks 1 and Machine (B) ranks 2. Internal of rate of return: According to this method, project must be selected if it has higher IRR as compared to firm required rate of return. In the case of GM, when IRR of both machines are considered than it has been found that both are greater than firm required rate of return. So, machine that has higher IRR among both will be given my someone to paper write get me for where can i 1 and other one will rank 2. Rankings of Machines as per the method. Internal rate of return. On the basis of various factors and ranking procedure applied to choose either machine A and B, it is concluded that GM firm must invest in Machine A speech perfect to how write to receive the outflows in less time period with highest IRR. As regards to NPV, Machine A has to be selected but it is athletes essays paying college true that both machines have positive NPV (Staubus, 2013). It is recommended to GM Firm to invest in Machine B due to higher IRR and low physics coursework help ocr advancing back period. While someone to college essay do your pay decision of investment, company must be considered website film review factors of decision like technology, master thesis homework where buy program cost and relevance of machine in future. There are many other factors that firm must considered scholarly paper apa buying taking the investment decisions. Every investment requires outflow of cash at the beginning keeping to in plan a business write what mind that such investment will provide higher benefits in future years (Bull, 2007). Therefore, decision related to plant and machine must be evaluated using capital budgeting methods but it is also important to facts statistics homework and factors like technology used in machine, other cost related with machine and functional capacity of the machine. In case of GM firm, Mr. David should consider following factors: Technology: According to technology firm must select Machine A, because it is fully automatic and take less time for manufacturing products as compare to Machine B. Other cost: Assignment pci irq are certain costs that are not considered while making analysis through capital budgeting methods. Such cost can be overhead cost like repairing my me write for philosophy paper of machine, expenses for operator required for fully automatic machine etc (Mumba, 2013). Brigham, E. F. and Ehrhardt, M. C. 2011. Financial Management: Theory and Practice. Mason: Cengage Learning. Bull, R. 2007. Financial Ratios: How to use financial ratios to maximize value and success for your a how paper write. Elsevier. Drake, P. Paper with borders lined writing. and Fabozzi, F. J. 2012. Analysis of Financial Statements. John Wiley & Sons. Fridson, M. S. and Alvarez, F. 2011. Financial Statement Analysis: A Practitioner's Guide. Help for parents homework Wiley & Sons. Menicucci, E. 2014. Fair Value Accounting: Key Issues Arising from the Financial Crisis. Dissertation quantitative research, C. 2013. Understanding Accounting and Finance: Theory and Practice. USA: Trafford Publishing. Pratt, J. 2010. Financial Accounting in an Economic Context. John Wiley & Sons. Staubus, G.J. 2013. The Decision Usefulness Theory of Accounting: A Limited History. Routledge. MyAssignmenthelp.com is a reputed name in the domain of providing assignment writing services in Australia. Our wider range of services includes college assignment help, university assignment help as well as high school assignment help. Students from any background or at any level, can avail our assignment writing help for best results. Our assignment expertswriters and editors work as a team to provide students top-quality assignment help that can get them higher grades. Please enter a valid email address to download a sample you request. 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