This week, we develop the theory and application of capital budget analysis. The theory was robust, the calculations mathematically and logically defined, and many of the real-world problems, likely to be encountered, were addressed. As capital budgeting essentially re-invents the company through major long-term expenditures it is arguably one of the most critical functions that financial management performs. However, based on my personal experiences, extensive empirical data, and antidotal data – many firms routinely experience significant failures in their selection of capital projects.
The assignment for this topic consists of three parts:
1, Part 1, I would like for you to briefly review either your personal experiences and/or the financial literature to identify and present a description of one actual capital project/product failure and the reasons attributed to the failure.
Remember this is a one to two paragraph exercise – do not go overboard – a few hours research and summation is all thats required. I am interested only in your short, concise description of the project and the major reasons you believe it failed.
In your response please provide financial information regarding the project (what is available): initial outlay, projected cash flows, final dollar losses.
2) Part 2, Synthesize your one-paragraph position on what 3-5 specific factors you believe most likely to contribute to capital project analysis failure.
3) Part 3, Reflection the students also should include a paragraph in their own words reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace.
Use material from this weeks as reference
Read sections 1, 2, and 4 of chapter 11 Capital Budgeting
Section 1 Introduction to Capital Budgeting
Section 2 The payback method
Section 4 Net Present Value
Chapter 11, Capital Budgeting (SEE ATTACHMENT)
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more