For this Assignment, review the information in the scenario posted in the entry titled Week 3 Assignment. You will utilize the information in this week’s Resources and media to make a recommendation in regard to a capital expenditure.
- Part 1: Prepare a spreadsheet using Excel or a similar program in which you compute the following for each proposed location.
- Accounting rate of return on investment
- Net present value
- Internal rate of return
- Part 2: Utilizing Word or another word processing software program, prepare a written report for the Board of Directors. The intended audience is clear from the salutation and the language used throughout the report.
- Include a detailed and thorough explanation of the conclusion you reached regarding the feasibility of each proposal supported by the calculations prepared in Part 1.
- Explain at least five non-financial items (e.g., culture, language, etc.), which may impact the perceived desirability of each location.
- Select the one location you recommend the Board invest in. Explain your rationale in precise and detailed language.
Zimmerman, J. L. (2011). Accounting for decision making and control (7th ed.). New York, NY: McGraw-Hill.
- Chapter 3, “Opportunity Cost of Capital and Capital Budgeting” (pp. 85-115)
Likierman, A. (2009, October). The five traps of performance measurement. Harvard Business Review, 87(10), 96–101.
Raynor, M. E., & Ahmed, M. (2013, April). Three rules for making a company truly great: A quest for reliable data on organizational excellence yields surprisingly simple guidelines. Harvard Business Review, 91(4), 108–117.
Laureate Education (Producer). (2012). Using Excel to make accounting computations [Video file]. Baltimore, MD: Author.