Critical Thinking Assignment

Critical Thinking Assignment

Module 12 – Project Evaluation—Cash Flows and Capital Budgeting Techniques

Q- Cash Flows and Capital Budgeting Techniques

Complete the following problems:

Problem 1: Net Present Value (NPV) and Internal Rate of Return

Problem 2: Profitability Index (PI) and Payback Period

Problem 3: Uneven Cash Flows

Problem 4: Calculating Free Cash Flows

Problem 5: Calculating project cash flows and NPV

Following the data provided on the attached Excel, complete the problems in an Excel spreadsheet. Be sure to show all your work on the Excel spreadsheet to receive credit; no hard keys.

Learning Outcomes

Analyze approaches to ranking capital projects.

Evaluate the net present value, the internal rate of return, the payback period, and the profitability index.

Weigh project risk.

Readings

Required:

Chapter 10: Capital-Budgeting Techniques and Practice in Foundations of Finance

Chapter 11: Cash Flows and Other Topics in Capital Budgeting in Foundations of Finance

Alghamdi, B., Khadawardi, H., Alghamdi, B., Almathami, K., Alshimai, A., Alqahtani, M., Alanazi, H., Alfawaz, F., Alodhaibi, S., & Talukder, M. (2022). Key performance indicators for measuring sustainable performance: A case study of implementing Saudi Arabia’s Vision 2030 strategy. Performance Improvement Quarterly, 34(4), 491–519. https://doi.org/10.1002/piq.21359

Siziba, S., & Hall, J. H. (2021, February). The evolution of the application of capital budgeting techniques in enterprises. Global Finance Journal, 47(2), 1-42.

Recommended:

Chapter 10 PowerPoint Slides

Chapter 11 PowerPoint Slides

Fi Plan Partners. (2022, May 5). Understanding capital structure. [Video]. YouTube.