Assignment 2—Applying Decision-Making Skills
As a manager, part of your role is to develop strategy, and share this strategy with various stakeholders within the organization. This assignment will allow you to take your findings as a manager and communicate these findings to those who are affected.
Your company has been presented with a decision on replacing a piece of equipment for a new computerized version that promotes efficiency for the upcoming year. As manager you will need to decide whether or not the purchase of the new equipment is a worthwhile investment and to communicate your recommendations to Executive Management for a final decision. To be convincing, sufficient support for your recommendations must be provided in order to be considered valid and accepted.
|Present Book Value||30,000|
|Annual Cash Operating Costs||145,000|
|Current Market Value||15,000|
|Market Value in Ten Years||0|
|Remaining useful Life||10 years|
|Annual Cash Operating Costs||50,000|
|Market Value in Ten Years||0|
|Useful Life||10 years|
|Cost of Capital||10%|
|Payback requirement||6 years|
In this assignment, use the information above to develop a comprehensive analysis using NPV, Payback Method, and IRR to develop a recommendation on replacing the existing equipment with a new computerized version. Develop an executive summary of your findings in a Microsoft PowerPoint presentation format to present to Executive Management.
Do the following in your presentation:
Develop a 10-12 slide presentation in PowerPoint format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M4_A2.ppt.
By Wednesday, December 4, 2013, deliver your assignment to the M4: Assignment 2 Dropbox.
|Assignment 2 Grading Criteria||
|Wrote a statement of the problem or topic, a concise analysis of the findings, and a recapitulation of any main conclusions or recommendations.||
|Explained the summary using specific details including calculations.||
|Explained how principles of capital budgeting, such as the payback method, IRR, and NPV, can be used to assess the potential projects and assist in the decision-making process displaying knowledge of capital budgeting techniques.||
|Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; and displayed accurate spelling, grammar, and punctuation.||
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