Strayer FIN100 Week 10 Assignment Latest 2024

FIN100 Principles of Finance

Week 10 Assignment

- Capital Management

Overview

In this assignment, you will analyze two potential projects for a company investment based on net present value (NPV) and internal rate of return (IRR). The webtext templates will guide you toward your final deliverable.

Video Overview

Calculate the Net Present Value - FIN100Links to an external site.

Scenario

Just Running is considering investing in the development of new products to complement its running shoes. The goal is to expand its product offerings in its current markets as a way to increase revenue. For this assignment, you will evaluate two projects to determine which one the company should invest in. You will need to consider two different capital budgeting methods (NPV and IRR) in order to make an informed decision regarding each project.

Instructions

*This assignment will be developed in the webtext templates, downloaded, and submitted in the Week 10 Assignment.

Use Net Present Value (NPV) and Internal Rate of Return (IRR) for each project in the spreadsheet templates:

Project #1: Just Running Compression Socks

The first project requires an initial investment of $50,000. The expected cash flow for Year 1 is $0, and the expected cash flow for Year 2 is $100,000. The discount rate is 10%.

Discount rate (rate of return).

Cash Flow Year 1.

Cash Flow Year 2.

Price of project.

Project #2: Just Running Water Bottles

The second project requires an initial investment of $50,000. The expected cash flow for Year 1 is $50,000, and the expected cash flow for Year 2 is $25,000. The discount rate is 10%.

Discount rate (rate of return).

Cash Flow Year 1.

Cash Flow Year 2.

Price of Project.

Use the spreadsheet templates to calculate the NPV for each project.

Calculate the NPV for Each Project:

NPV for Project 1:

NPV for Project 2:

Analyze the Results

What does the NPV tell us about Project 1 and why is this important?

What does the NPV tell us about Project 2 and why is this important?

Consider the IRR for Each Project

IRR for Project 1: Provided in webtext template.

IRR for Project 2: Provided in webtext template.

What does the IRR tell us about Project 1?

What does the IRR tell us about Project 2?

Make a Decision

Based on the long-term increase in value, which project is the better choice for Company X?

Why is this project a better choice?

How does this choice connect to the first finance principle, money has a time value?

The specific course learning outcome associated with this assignment is:

Use financial best practices to evaluate potential projects or investments.

Submission Instructions

Complete the assignment templates and assignment in the webtext - Chapter 8, Chapter 9, and Chapter 10.

Download your assignment.

Upload and submit your Week 10 assignment below.

Please note: You must finish all assignment templates (Chapters 8, 9, and 10) before you are able to complete your assignment.