October 19, 2025

For this Assignment, you will continue in your role as consultant to the executive team of a midsize copper smelting company in northern Canada.

Organizational Performance Analysis and Recommendations- Part 2

For this Assignment, you will continue in your role as consultant to the executive team of a midsize copper smelting company in northern Canada. As a reminder, here is a summary of the team’s current situation and need:

Due to some recent changes to the local environmental air quality laws, the company’s large coal-fueled smelting furnace is now operating out of compliance due to high levels of pollutants in the exhaust gases. The regulatory agency has given the company 12 months to demonstrate compliance, after which it will be fined $1,000 per day until the operations meet the regulation. The company has two alternatives. The first alternative is to install air scrubbers to reduce the output pollutant levels. The second alternative is to convert the smelting furnace from coal to natural gas. Both alternatives will meet the current regulatory requirements, but there is a slight concern that the air scrubber solution may not meet future regulatory restrictions. The executive team wants you to perform a financial performance analysis on both alternatives using several different capital budgeting methodologies. The team also is seeking guidance on non-financial considerations regarding the company’s ethical and social responsibilities related to this decision.

Last week, for Part 1 of your report, you conducted a financial performance analysis on both alternatives using several different capital budgeting methodologies. This week, in Part 2 of the report, you will provide company leadership with guidance related to the company’s ethical responsibilities related to this decision.

As a reminder, you will continue adding to the report you began developing last week. In addition to the requirements that follow, be sure to incorporate references to appropriate academic sources, such as those found in this week’s Learning Resources or those in the Walden Library.

To prepare for this Assignment:

Return to the Module 3 Assignment Template you utilized in Week 8. With the research and readings from Week 8 and Week 9 in mind, incorporate any feedback, as needed, into your report as you complete Part 2.

Submit Part 2 of your report to the executive team. Part 2 of your report should be approximately 3–4 pages in length (excluding title page and references) and should address the following:

Part 2: Ethical Responsibilities

During several visits to the plant, you have overheard some employees and mid-level supervisors discussing the issues related to the smelting furnace and some potential “solutions” to the current regulatory problem. Some of these conversations are troubling because they are suggesting covering up the issue through false or misleading data reporting. Based on these conversations, you feel obligated to discuss the issue of ethical responsibility with the executive team. Be sure to address the following:

Examine the importance of ethics in managerial accounting.
Analyze how ethics, both good and bad, can affect the organization as a whole. Consider not only the financial impact but also the direct and indirect impact on stakeholders, such as employees, customers, suppliers, etc.
Propose at least two recommendations that the company could implement to help ensure high ethical responsibility at all levels of the organization.

Account for Management Decision Making

Week 9 Learning Resources

Organizational Ethics

Do all organizations act in an ethical manner? Before this question can be answered, it is important to understand what ethics are. Through these resources, you will determine what constitutes ethical behavior and how it impacts the people working in an organization as well as the organizational culture.

· Byars, S. M., & Stanberry, K. (2018). IntroductionLinks to an external site. . In Business ethics . OpenStax. https://openstax.org/books/business-ethics/pages/1-introduction

· Byars, S. M., & Stanberry, K. (2018). 1.1 being a professional of integrityLinks to an external site. . In Business ethics. OpenStax. https://openstax.org/books/business-ethics/pages/1-1-being-a-professional-of-integrity

· Byars, S. M., & Stanberry, K. (2018). 1.2 ethics and profitabilityLinks to an external site. . In Business ethics . OpenStax. https://openstax.org/books/business-ethics/pages/1-2-ethics-and-profitability

· Byars, S. M., & Stanberry, K. (2018). 1.3 multiple versus single ethical standardsLinks to an external site. . In Business ethics . OpenStax. https://openstax.org/books/business-ethics/pages/1-3-multiple-versus-single-ethical-standards

· Hess, M. F., & Broughton, E. (2014, July–August). Fostering an ethical organization from the bottom up and the outside inLinks to an external site. . Business Horizons, 57 (4), 541–549. https://doi.org/10.1016/j.bushor.2014.02.004

· TED-Ed. (2015, June 8). How people rationalize fraud – Kelly Richmond Pope Links to an external site. [Video]. YouTube. https://www.youtube.com/watch?v=Tb6QX9Yy1GM

Ethics in Accounting

Ethical accounting is extremely important. If anyone with access to the accounting records decides to make changes to those records for whatever reason, the implications can be far reaching. Investors, lenders, customers, and other employees might make decisions—based on the unethical accounting—that they might not have made if they had a true picture of the accounting records.

· Franklin, M., Graybeal, P., & Cooper, D. (2019). 1.4 describe the role of the institute of management accountants and the use of ethical standardsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/1-4-describe-the-role-of-the-institute-of-management-accountants-and-the-use-of-ethical-standards

· Gottschalk, P. (2019). Evaluation of fraud examinations: The case of inappropriate accounting practices at Fuji XeroxLinks to an external site. . Deviant Behavior, 40 (11), 1421–1427. https://doi.org/10.1080/01639625.2018.1559640

· Walden University, LLC. (2024). Unethical accounting practices Download Unethical accounting practices [PDF]. Walden University Canvas. https://waldenu.instructure.com

Account for Management Decision Making

Week 8 Learning Resources

NVP, ARR, IRR, Payback

In these resources, you will study various accounting measurements that managers use to make decisions regarding the future of their company. Although most of the time the financial arm of the company will do the actual computations, it is important for managers to understand all of the measurements so they can apply them correctly to any situation.

· Franklin, M., Graybeal, P., & Cooper, D. (2019). Why it mattersLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/11-why-it-matters

· Franklin, M., Graybeal, P., & Cooper, D. (2019). 11.1 describe capital investment decisions and how they are appliedLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/11-1-describe-capital-investment-decisions-and-how-they-are-applied

· Franklin, M., Graybeal, P., & Cooper, D. (2019). 11.2 evaluate the payback and accounting rate of return in capital investment decisionsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/11-2-evaluate-the-payback-and-accounting-rate-of-return-in-capital-investment-decisions

· Franklin, M., Graybeal, P., & Cooper, D. (2019). 11.3 explain the time value of money and calculate present and future values of lump sums and annuitiesLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/11-3-explain-the-time-value-of-money-and-calculate-present-and-future-values-of-lump-sums-and-annuities

· Franklin, M., Graybeal, P., & Cooper, D. (2019). 11.4 use discounted cash flow models to make capital investment decisionsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/11-4-use-discounted-cash-flow-models-to-make-capital-investment-decisions

· Franklin, M., Graybeal, P., & Cooper, D. (2019). 11.5 compare and contrast non-time value-based methods and time value-based methods in capital investment decisionsLinks to an external site. . In Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/11-5-compare-and-contrast-non-time-value-based-methods-and-time-value-based-methods-in-capital-investment-decisions

· Walden University, LLC. (2024). ARR/ROI Download ARR/ROI [PDF]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2024). How to calculate NPV and IRR Download How to calculate NPV and IRR [PDF]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2024). Net present value, accounting rate of return, internal rate of return, and payback to make investment decisions Download Net present value, accounting rate of return, internal rate of return, and payback to make investment decisions [PDF]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2021). What are NPV and IRR? [Video]. Walden University Canvas. https://waldenu.instructure.com

Lakenya Campbell

Walden University

Account for Management Decision Making

Dr. Schmidt

October 19th, 2025

Organizational Performance Analysis and Recommendations—Part 1

This report analyzes two capital investment proposals; the Air Scrubbers and the Furnace Fuel Change in order to get the copper smelting enterprise in line with the new environmental laws. The Net Present Value (NPV), Internal Rate of Return (IRR), Accounting Rate of Return (ARR), and Payback Period methodologies were used in evaluating the financial performance for each proposal (Walden University, LLC, 2024c). The calculations were used to decide the most economical option.

Capital Budgeting Results Summary

The comparison made between the calculated metrics shows that the Furnace Fuel Change project is more financially viable, as it produces greater returns in all the discounted cash flow measures.

Metric	Air Scrubbers	Furnace Fuel Change
Net Present Value (NPV)	$835,256	$1,674,358
Internal Rate of Return (1RR)	14%	21%
Accounting Rate of Return (ARR)	20.00%	21.66%
Payback Period (Years)	6.00	4.40

Financial Performance Analysis and Recommendation

The analysis contributes greatly to the choice of the Furnace Fuel Change project. The main technique used to maximize the shareholder wealth is the NPV, and it yielded a positive value of $1,674,358, approximately twice that of the Air Scrubbers project (Walden University, LLC, 2024a). Moreover, the Furnace Fuel Change had an IRR of 21%, greater than the 6% capital cost, which means that the rate of return on the investment is great. Conversely, the Air Scrubbers proposal returned a lower IRR of 14%.

Besides profitability, it is important to evaluate how much time a project would take to recover the initial capital (Walden University, LLC, 2024b). The Payback Period of the Furnace Fuel Change is about 4.40 years and much lower than the 6.00 years of the Air Scrubbers. As a result, the fast recovery decreases the exposure of the company to risk and makes capital available for reinvestment at an earlier point. Although the Accounting Rate of Return is not based on the time value of money, it also prefers the Furnace fuel change at 21.66% (Franklin et al., 2019). With the dominance in all financial indicators, the Furnace Fuel Change project shall provide the maximum return, thus the best option.

References

Franklin, M., Graybeal, P., & Cooper, D. (2019). 11.5 Compare and contrast non-time value-based methods and time value-based methods in capital investment decisions. In Principles of accounting, volume 2: Managerial accounting. OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/11-5-compare-and-contrast-non-time-value-based-methods-and-time-value-based-methods-in-capital-investment-decisions

Walden University, LLC. (2024a). How to calculate NPV and IRR [PDF]. Walden University Canvas. https://waldenu.instructure.com

Walden University, LLC. (2024b). ARR/ROI [PDF]. Walden University Canvas. https://waldenu.instructure.com

Walden University, LLC. (2024c). Net present value, accounting rate of return, internal rate of return, and payback to make investment decisions [PDF]. Walden University Canvas. https://waldenu.instructure.com

Module 3 Assignment: Organizational Performance Analysis and Recommendations

Prepared by: Replace this text with your name.

Date: Replace this text with the submission date.

Walden University

MBAX 6050: Accounting for Management Decisions

Executive Summary

Replace this text with your executive summary.

Part 1: The Financial Performance Analysis

Replace this text with introductory information. Add or remove headings as necessary.

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Insert your calculations of the NPV, payback, IRR, and ARR from Excel. Add or remove headings as necessary. For information on inserting data from Excel into Word, refer to the following: Microsoft. (n.d.). Insert a chart from an Excel spreadsheet into Word. https://support.microsoft.com/en-us/office/insert-a-chart-from-an-excel-spreadsheet-into-word-0b4d40a5-3544-4dcd-b28f-ba82a9b9f1e1

[Sub-Heading]