Capital Budgeting Case
Your company is thinking about acquiring another
corporation. You have two choices—the cost of each choice is $250,000. You
cannot spend more than that, so acquiring both corporations is not an option.
The following are your critical data:
Corporation A
Revenues = $100,000
in year one, increasing by 10% each year
Expenses = $20,000 in year one, increasing by 15% each year
Depreciation expense = $5,000 each year
Tax rate = 25%
Discount rate = 10%
Corporation B
Revenues = $150,000 in year one, increasing by 8% each year
Expenses = $60,000 in year one, increasing by 10% each year
Depreciation expense = $10,000 each year
Tax rate = 25%
Discount rate = 11%
Compute and analyze
items (a) through (d) using a Microsoft® Excel® spreadsheet. Make sure all
calculations can be seen in the background of the applicable spreadsheet cells.
In other words, leave an audit trail so others can see how you arrived at your
calculations and analysis. Items (a) through (d) should be submitted in
Microsoft® Excel®; indicate your recommendation (e) in the Microsoft® Excel®
spreadsheet; the paper stated in item
(f) should be submitted consistent with APA guidelines.
a. A 5-year
projected income statement
b. A 5-year
projected cash flow
c. Net present
value (NPV)
d. Internal rate of
return (IRR)
e. Based on items
(a) through (d), which company would you recommend acquiring?
f. Write a paper
of no more 1,050 words that defines, analyzes, and interprets the answers to
items (c) and (d). Present the rationale behind each item and why it supports
your decision stated in item (e). Also, attempt to describe the relationship
between NPV and IRR. (Hint. The key factor is the discount rate used.) In addition to the paper, a Micosoft® Excel®
spreadsheet showing your projections and calculations must be shown and
attached.Stakeholders
1.Final Project Milestone #5: Stakeholders
Read Stakeholder Management Capability and A Stakeholder
Approach to Corporate Social Responsibility. In a post titled 5-2:
Stakeholders, answer the following questions:
How does your selected company involve its stakeholders in
decisions?
What has been your experience? What do stakeholders report?
How do the reports of the different stakeholder groups differ?
How does the company manage opposing stakeholder interests?
How do corporate values and vision affect its decisions?
Provide examples. Remember, you are to report on what the
company says about itself, your experience, and the experience of its stakeholders.
Cite at least two sources (maybe the articles listed above?).
2. Case Study #2: Partnership for Lebanon and Cisco Systems
The project manager for the Partnership for Lebanon (PFL)
and Cisco Systems’ regional director of corporate affairs for the Middle East
and Africa met three years after PFL was first initiated.
Their meeting revolved primarily around the challenge of
sustainability and what useful suggestions they could put forward to their
partners to ensure that the projects initiated through PFL would have a life of
their own and not be dependent on the continuous substantive investments of the
partners.
This case focuses on how companies can leverage their core
competence to maximize value for both business and society and the various social
and economic goals this can achieve.
In this case study analysis, you are to address the
following, utilizing the headings below in the body of the paper. You must cite
all facts from the case study itself. In addition to citing from the case
study, you must also cite at least two other resources. Suggested assignment
length (not including cover page and reference page): 6–8 pages.
Introduction ? Provide a synopsis of the company and the
case.
CSR Lessons ? Analyze the case and discuss the key strategic
lessons learned from the PFL concerning the implementation and running of
development programs that could be adopted by any senior manager. Cisco,
Corporate Sponsors, and PFL ?
Discuss the leadership position that Cisco assumed in the
PFL. Analyze the engagement of the PFL corporate partners. How did they benefit
from their engagement? What added value do partnerships bring to CSR
initiatives, in particular to PFL and in general to any
The Challenge of Sustainability ? Make recommendations to
help address the challenge of sustainability in development projects led by CSR
initiatives.
Base your suggestions on PFL examples from the case.
Conclusion ? Summarize in 2–3 paragraphs the most important
elements addressed in this analysis.
References ? Include a separate page of APA-formatted
references. At the minimum, the case study should be included, as well as two
outside references. There should be no items listed in the references that were
not included in the body of the paper as in-text citations.
The second assignment as to be between 6-8 pages.
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