What I need is to put all the modules that I'm going to attach together. I already finished the audio presentation. All I need is all the modules to be together in one assignment. Attached are modules 1-5, and also the guidelines and rubrics for this pape

Financial Analysis and planning

Introduction

Metropolitan Transportation Authority is an essential part of the transportation sector in New York City as one of the firms that provides commuter services in the town. New York City has high traffic congestion; as such, the company intends to address this problem that has increased the cost of living in the city. The company has come up with a plan that helps solve the problem by introducing a new car. The introduction of the new car will cause the company some money. Thus, the firm intends to understand the financial aspect of the project. The company plan includes an introduction to new cars that help to ease traffic congestion in the city. To achieve must plan how it funds the costs and predicts the cash flows. Therefore, budgeting is important as it will help in establishing the expenses needed to help the business develop to go effectively by indicating costs of the business in costs such as salaries and wages, rent, advertising, expenses, paying interests, supplies, utilities and personal property (Brealey eta l., 2012).

Predicted Sales and Costs

Projected Costs

The expected fixed cost of a new plan to build a new car is expected to be $8,000,000 for the next four years. The predicted variable cost will be 15% of the total revenue for the sales of the car for each year. The unit price per car is predicted to be $7500, and the sale quantity is expected to total 3600 in year 1, 4300 in year 2, 5200 in year 3 and 3900 in year 4. The taxes are expected to be 38%.

The cash flows for year 1, 2, 3, and 4

Also, the cost of having a new machine/plant is expected to be $25,000,000. The firm will require a net working capital of $1,250,000.

Sources of Funding

The funds will be raised through equity and debt. The difference between equity and debt funding is that debt is acquiring a loan for interest, while equity is selling shares of the company. Equity can be done through venture capital, private, or stock markets. (Karsh & Fox, 2014). Also, public source funding re-regulated by a set of legislative bodies hence requires complicated procedures and contracts since it comes from the government funds. In contrast, private investors come from willing individual and private organizations without complicated procedures (Karsh & Fox, 2014). Thus the difference in terms of the source of funding of the non-profit organization is that for the private well-wishers and founders fund the organizations. In contrast, the public, non-profit organizations funds are donations from the general populations.

Capital Budgeting

Capital budgeting technique to ensure the effective and efficient use of funds to achieve project goals. Thus, capital budgeting is a framework that institutes how different organizational goals are made and how resources are distributed. Therefore, the state explains how capital is related to engineering. Acquisition of assets might be made using a different source of funds like retained profits, loans, shareholders' contributions. As such, each source of funds has its strength and weakness, particularly in relation to income taxation. There are different factors that must be considered to ensure effective capital budgeting. Such factors include the risk of capital loss and loss of expected returns. For example, if the firm intends to spend $10000 in either of the following risks: high, medium, and low-risk projects. The investors’ decision of investments will be influenced by the amount of risk an organization is considering to take must have more returns. Therefore, if high risks offer 20% and moderate risk of offers 19% return, it is clear that the engineers would likely go with a 19% average return as it is less risk and favorable to the organization (Newnan et al., 2004). This is because the high risk doesn't have much return to warrant its risk status. The risks return with a higher gap, like 20%, and 14% is more difficult to choose, and a decision will be influenced by factors such as organization policy on investment, extra available capital, and availability of investors.

Net Present Value Analysis

The resources used in an organization helps in ensuring that the intended project becomes successful. As such, a firm that fails to allocate resources effectively eventually suffers in the long-term as it is challenging to reverse long-term decisions that affect the organization's future outputs. Thus proper resolution will help the company to increase revenue. Capital budgeting “is a crucial decision as it requires a huge capital allotment, and a wrong decision could bleed a lot of money which could be catastrophic for a business (Baucells & Bodily, 2018)”.

According to Libby, (2017) NPV refers to the return a company will get from investments from a given period. The differences between organization cash inflows and cash outflows factoring interest rates help in determining interest rates. Cash inflows are calculated as cash inflows less tax income multiplied by the discounted rate. The expected cash flows of the business are sales revenue that a company intends to sell and generate for one year. Sale revenue is defined amount of quantity sold multiplied by the price of the products. Therefore, the sale revenue is crucial in calculating NPV.

Also, the company has predicted that its fixed expenses for the next couple of years will be $4,150,000. Fixed cost is an expense that business incurs even if it's not produced. An example of a fixed cost is the lease agreement (Marchioni et al., 2018). Thus, whether the company produces goods and services or not, the fixed expenses are incurred. As such, Alteryx Inc. fixed expenses are $4,150,000 regardless of the number of units produced.

Year MACRS schedule

This is calculated as follows.

Depreciation expense refers to the amount of money that an organization reports in the financial statement (Bloomberg, 2017). Thus, it is the asset's cost. Earnings before Income Tax (EBIT) can be defined as business income prior to deducting taxes. The income before tax for the first year is $ 9,269,000.00. The calculation for income before taxes is calculated by deducted cost of goods sold and operating expenses.

The IRR of the project is 41.05%. The project will generate an internal rate of return; thus, the company should go head and investment in the new project that will help in introducing a new car in New York City. As such, the company will address traffic congestion; thus, improving the living conditions of the New Yorkers and also make money in the process.

References

Baucells, M., & Bodily, S. E. (2018). Net Present Value Analysis of Projects Under Expected Utility.

Brealey, R. A., Myers, S. C., Allen, F., & Mohanty, P. (2012). Principles of corporate finance. Tata McGraw-Hill Education.

Bloomberg. (2017, December). Company Overview of Metropolitan Transportation