Evaluation of Capital Projects

Requirements

Jennifer reiterates that your report is critical for the company to select the project that will bring the most value to shareholders. Your calculations and report should address these items for her and other stakeholders:

· Apply computations of capital budgeting methods to determine the quality of the proposed investments.

. Use budgeting tools to compute future project cash flows and compare them to upfront costs. Remember to only evaluate the incremental changes to cash flows. 

. Demonstrate knowledge of a variety of capital budgeting tools including net present value (NPV), internal rate of return (IRR), payback period, and profitability index (PI). The analysis of the capital projects will need to be correctly computed and the resulting decisions rational.

· Evaluate the capital projects using data analysis and applicable metrics that align to the business goal of maximizing shareholder value.

. Evaluate capital projects and make appropriate decision recommendations. Accurately compare the indicated projects with correct computations of capital budgeting tools and then make rational decisions based on the findings.

· Select the best capital project, based on data analysis and evaluation, that will add the most value for the company.

· Prepare an appropriate evaluation report for requestors, using sound research and data to defend your decision.

. Justify your decision with a clear analysis showing the findings of the analysis and which project has the best chance to increase shareholder value.

. Use your calculations and data to provide a clear picture of why your recommendation is the right one. This goes beyond just regurgitating the data. Think about how the data can tell the story that will be meaningful to the readers. 

Deliverable Format

For this assessment, create two deliverables: 

1. An Excel spreadsheet showing the required cash flow forecasts and capital budgeting tool calculations for each project. Use the same spreadsheet but create separate tabs for each project.

2. A report providing an analysis of the computations, the project selection decision, and justification for the decision, as well as its impact on the value of the firm. The project selection decision must have an analytical rationale to support it. 

Report requirements:

· Ensure written communication is free of errors that detract from the overall message and quality.

· Use at least three scholarly resources. 

· Your report should be between 6 and 8 pages.

· Use 12 point, Times New Roman.

Related company standards:

· Your report is a professional document and should follow the corresponding MBA Academic and Professional Document Guidelines (found in the MBA Program Resources), including single-spaced paragraphs.

· Use APA-formatted references.

Evaluation

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies through corresponding scoring guide criteria:

· Competency 1: Apply the theories, models, and practices of finance to the financial management of an organization.

. Apply computations of capital budgeting methods to determine the quality of the proposed investments.

· Competency 2: Analyze financing strategies to maximize stakeholder value.

. Evaluate the capital projects using data analysis and applicable metrics that aligns to the business goals.

· Competency 3: Apply financial analyses to business planning and decision making. 

. Select the best capital project, based on data analysis and evaluation, that will add the most value for the company.

· Competency 5: Communicate financial information with multiple stakeholders.

. Prepare an appropriate evaluation report for requestors, using sound research and data to defend the decision.

Faculty will use the scoring guide