Description Create an 8- to 10-slide presentation showing the comparison of the net present value approach with the internal rate of return approach that you calculated. Complete the following in your presentation: Analyze the results of the net present value calculations and the significance of these results, supported with examples. Determine which project should be adopted based on the net present value approach and provide rationale for your decision.Analyze the results of the internal rate of return calculation and the significance of these results, supported with examples. Determine which project should be adopted based on the internal rate of return approach and provide rationale for your decision.Determine the preferred method in the given circumstances and provide reasoning and details to support the method selected.Synthesize results of analyses and computations to determine the best investment opportunity to recommend to the president of Donovan Enterprises and provide rationale for your recommendation.Include detailed speaker notes. 2 attachmentsSlide 1 of 2attachment_1attachment_1attachment_2attachment_2.slider-slide > img { width: 100%; display: block; } .slider-slide > img:focus { margin: auto; } Unformatted Attachment Preview 1 Comp 1 Assessment Part 1 Hank Stump University of Phoenix ACCCB/543 January 7, 2021 Karen Boulay 2 If you did not have any challenges, respond to the following questions: • • What prepared you for these calculations? What advice would you give a classmate who needs assistance? While I didn’t experience any challenge in conducting the ratio analysis, several factors prepared me for these calculations. One of the things that prepared me for the latter calculations is my past encounters with such calculations, as this was not the first time, I was calculating the latter ratios. Thus, I found the practice assignment calculations relatively simple due to my past experiences calculating such. Apart from this, my good understanding of the classifications of the various assets and liabilities as either current or non-current is the other thing that prepared me for the calculations. As a result of my good understanding of the assets and liabilities as either current or non-current, I easily and accurately calculated the current ratio and quick ratio without confusion. Lastly, the other thing that prepared me for the calculations was the previous analysis I had done regarding the ratios to learn how they are calculated. To help a classmate who needs assistance, I would advise them to first go over the various classifications of assets and liabilities as either current or non-current since through this; they would get a chance to better understand which of the provided assets and liabilities are current and non-current thus calculating the quick and current ratios easily and without confusion. In addition to this, I would also advise a classmate in need of assistance to make sure that they first go over the text and other relevant resources that may contain similar calculations to ensure that they familiarize themselves with how they are calculated. Lastly, I would advise the classmate to first cram and understand the various ratios’ formulas. Through this, they would have an easy time applying the formulas to the provided information. 3 References Edmonds, T., Edmonds, C., Tsay, B., & Olds, P. (2016). Fundamental managerial accounting concepts (8th ed.). McGraw-Hill Education. Project A Rate of return Initial cost Period 8% 400.000 1 2 3 4 NPV Project B 8% 160.000 126.000 52.800 126.000 52.800 126.000 52.800 126.000 52.800 $417.327,98 $174.880,30 In terms of the NPV, project A should be adopted since it has the highest NPV value between the two projects. While the two projects have positive NPVs thus being viable, project’s A NPV is greater than that of B thus being preferable. As illustrated above the NPV of project A is $417,327.98 while that of B is 174,880.30 making project A more preferable than B and the best choice to adopt. Project A Rate of return Initial cost Period 0,08 400000 0 1 2 3 4 IRR Project B 0,08 160000 (400.000) (160.000) 126.000 52.800 126.000 52.800 126.000 52.800 126.000 52.800 9,931039% 12,110361% Based on the IRR, project B should be adopted considering that it has a higher internal rate of return compared to project A. While project’s internal rateof retun is expected to be 9.931039% that of project B is expected to be 12.110361% making it more profitable than the latter. Thus project B should be adopted based on the IRR method. Based on the above analysis of the NPV and the IRR of the two projects, project B is preferable considering that it has a higher rate of retun compared to project A. Further, since project A is more capital intensive and has no salvage value,project B would thus be a better option to adopt as it is cheap and has a greater return. Purchase answer to see full attachment Tags: net present value Internal Rate of Return Capital Budgeting Techniques NPV technique mutually exclusive projects User generated content is uploaded by users for the purposes of learning and should be used following Studypool’s honor code & terms of service.
Description
Create an 8- to 10-slide presentation showing the comparison of the net present value approach with the internal rate of return approach that you calculated. Complete the following in your presentation: Analyze the results of the net present value calculations and the significance of these results, supported with examples. Determine which project should be adopted based on the net present value approach and provide rationale for your decision.Analyze the results of the internal rate of return calculation and the significance of these results, supported with examples. Determine which project should be adopted based on the internal rate of return approach and provide rationale for your decision.Determine the preferred method in the given circumstances and provide reasoning and details to support the method selected.Synthesize results of analyses and computations to determine the best investment opportunity to recommend to the president of Donovan Enterprises and provide rationale for your recommendation.Include detailed speaker notes.
2 attachmentsSlide 1 of 2attachment_1attachment_1attachment_2attachment_2.slider-slide > img { width: 100%; display: block; }
.slider-slide > img:focus { margin: auto; }
Unformatted Attachment Preview
1
Comp 1 Assessment Part 1
Hank Stump
University of Phoenix
ACCCB/543
January 7, 2021
Karen Boulay
2
If you did not have any challenges, respond to the following questions:
•
•
What prepared you for these calculations?
What advice would you give a classmate who needs assistance?
While I didn’t experience any challenge in conducting the ratio analysis, several factors
prepared me for these calculations. One of the things that prepared me for the latter calculations
is my past encounters with such calculations, as this was not the first time, I was calculating the
latter ratios. Thus, I found the practice assignment calculations relatively simple due to my past
experiences calculating such. Apart from this, my good understanding of the classifications of
the various assets and liabilities as either current or non-current is the other thing that prepared
me for the calculations. As a result of my good understanding of the assets and liabilities as
either current or non-current, I easily and accurately calculated the current ratio and quick ratio
without confusion. Lastly, the other thing that prepared me for the calculations was the previous
analysis I had done regarding the ratios to learn how they are calculated.
To help a classmate who needs assistance, I would advise them to first go over the
various classifications of assets and liabilities as either current or non-current since through this;
they would get a chance to better understand which of the provided assets and liabilities are
current and non-current thus calculating the quick and current ratios easily and without
confusion. In addition to this, I would also advise a classmate in need of assistance to make sure
that they first go over the text and other relevant resources that may contain similar calculations
to ensure that they familiarize themselves with how they are calculated. Lastly, I would advise
the classmate to first cram and understand the various ratios’ formulas. Through this, they would
have an easy time applying the formulas to the provided information.
3
References
Edmonds, T., Edmonds, C., Tsay, B., & Olds, P. (2016). Fundamental managerial accounting
concepts (8th ed.). McGraw-Hill Education.
Project A
Rate of return
Initial cost
Period
8%
400.000
1
2
3
4
NPV
Project B
8%
160.000
126.000
52.800
126.000
52.800
126.000
52.800
126.000
52.800
$417.327,98 $174.880,30
In terms of the NPV, project A
should be adopted since it has
the highest NPV value between
the two projects. While the two
projects have positive NPVs
thus being viable, project’s A
NPV is greater than that of B
thus being preferable. As
illustrated above the NPV of
project A is $417,327.98 while
that of B is 174,880.30 making
project A more preferable than
B and the best choice to adopt.
Project A
Rate of return
Initial cost
Period
0,08
400000
0
1
2
3
4
IRR
Project B
0,08
160000
(400.000)
(160.000)
126.000
52.800
126.000
52.800
126.000
52.800
126.000
52.800
9,931039% 12,110361%
Based on the IRR, project B
should be adopted considering
that it has a higher internal rate
of return compared to project
A. While project’s internal
rateof retun is expected to be
9.931039% that of project B is
expected to be 12.110361%
making it more profitable than
the latter. Thus project B
should be adopted based on the
IRR method.
Based on the above analysis of
the NPV and the IRR of the
two projects, project B is
preferable considering that it
has a higher rate of retun
compared to project A.
Further, since project A is more
capital intensive and has no
salvage value,project B would
thus be a better option to adopt
as it is cheap and has a greater
return.
Purchase answer to see full
attachment
Tags:
net present value
Internal Rate of Return
Capital Budgeting Techniques
NPV technique
mutually exclusive projects
User generated content is uploaded by users for the purposes of learning and should be used following Studypool’s honor code & terms of service.
