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Title: Business Initiative and Technology
Student Name:
University
BUSI 100 - Enterprise Business Applications and Communications
Assignment 3: Financial Forecasting and Capital Budgeting
Due Week 3 and worth 160 points
In Part XLIII of your business plan, you will focus on financial forecasting and capital budgeting to allocate
financial resources effectively, evaluates investment opportunities, and optimizes capital allocation decisions.
Your objective is to develop a comprehensive financial forecast and capital budget that aligns with strategic
priorities, maximizes shareholder value, and supports long-term growth objectives.
Write a page paper in which you:
1. Conduct a financial analysis to assess the current financial position and performance of your organization.
Evaluate key financial metrics such as revenue growth, profitability, liquidity, solvency, and efficiency
ratios. Identify trends, patterns, and anomalies in financial data that may impact future financial
performance and capital budgeting decisions.
2. Define the strategic objectives and goals for financial forecasting and capital budgeting in your
organization. Identify key financial drivers and metrics that influence capital allocation decisions, such as
return on investment (ROI), net present value (NPV), internal rate of return (IRR), and payback period.
Articulate the importance of financial forecasting and capital budgeting as strategic tools that drive
business growth and value creation.
3. Develop a financial forecasting model to project future financial performance and cash flows under
different scenarios and assumptions. Forecast key financial statements such as income statement, balance
sheet, and cash flow statement based on revenue projections, expense forecasts, and capital expenditure
plans. Incorporate sensitivity analyses, scenario planning, and Monte Carlo simulations to assess the
impact of uncertainties and risks on financial projections.
4. Develop a capital budgeting framework to evaluate investment opportunities and allocate financial
resources effectively. Identify potential investment projects such as expansion initiatives, new product
developments, acquisitions, and capital expenditures. Evaluate investment criteria such as profitability,
risk, timing, and strategic fit to prioritize investment opportunities and allocate capital to high-impact
projects.
5. Conduct a cost-benefit analysis to assess the economic feasibility and financial viability of investment
projects. Estimate project costs, benefits, and cash flows over the project's lifecycle. Calculate financial
metrics such as NPV, IRR, payback period, and profitability index to evaluate the attractiveness and
viability of investment opportunities. Conduct sensitivity analyses and scenario analyses to assess the
impact of changes in key assumptions and variables on investment outcomes.
6. Develop risk management strategies to mitigate investment risks and uncertainties associated with capital
budgeting decisions. Identify potential risks such as market risks, operational risks, regulatory risks, and
project-specific risks that may impact investment performance. Implement risk mitigation techniques
such as diversification, hedging, insurance, and contingency planning to minimize downside risks and
protect investment returns.
Clickhereto view the grading rubric for this assignment.
Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and
writing skills, using the following rubric.
Points: 160 Assignment 3: Financial Forecasting and Capital Budgeting
Criteria
Unacceptable
Below 70% F
Fair
70-79% C
Proficient
80-89% B
Exemplary
90-100% A
1. Analyze the options
available for producing
the product or service.
Next, evaluate which of
the available options you
can take to streamline
operations.
Weight: 25%
Did not submit or
incompletely
analyzed the
options available for
producing the
product or service.
Did not submit or
incompletely
evaluated which of
the available
options you can
take to streamline
operations.
Partially analyzed
the options
available for
producing the
product or service.
Partially evaluated
which of the
available options
you can take to
streamline
operations.
Satisfactorily
analyzed the
options available for
producing the
product or service.
Satisfactorily
evaluated which of
the available
options you can
take to streamline
operations.
Thoroughly
analyzed the
options available for
producing the
product or service.
Thoroughly
evaluated which of
the available
options you can
take to streamline
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