Business Finance - Management Week 8 Assignment- Account for Managment Decision Making

Module 3 Assignment: Organizational Performance Analysis and Recommendations

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Date: Replace this text with the submission date.

Walden University

MBAX 6050: Accounting for Management Decisions

Executive Summary

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Part 1: The Financial Performance Analysis

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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

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Part 2: Ethical Responsibility

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Part 3: The Triple Bottom Line and Positive Social Change

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References

[Please delete this note before submitting your Assignment. For more information about formatting your reference list, please visit the following site: https://academicguides.waldenu.edu/writingcenter/apa/references .]

Include appropriately formatted references to support your Assignment. Refer to the Assignment guidelines for further information on the requirements.

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Account for Management Decision Making

Week 8 Assignment

Organizational Performance Analysis and Recommendations- Part 1

You have been hired by a midsize copper smelting company in northern Canada to act as a consultant and help the executive team determine its best course of action on a major decision. 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.

The product of your financial performance analysis will be a report for the executive team. 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 in the Walden Library.

To prepare for this Assignment:

· Download Module 3 Assignment Template.  Note: Be sure to keep a copy of your completed Assignment this week, as you will be adding to the same file for your Week 9 and Week 10 Assignments. 

· Your instructor will provide part of the data to complete the calculations for this week’s Assignment. To access that information, refer to  Doc Sharing .

Submit Part 1 of your report to the executive team, as well as the accompanying Excel file. Part 1 of your report should be approximately 2 pages in length (excluding title page and references) and should address the following:

Part 1: The Financial Performance Analysis

For the first part of your report, you will provide an analysis of the financial performance of both alternatives using net present value (NPV), accounting rate of return (ARR), internal rate of return (IRR), and payback. ( Note: ARR is also called Return on Investment, or ROI.) In  Doc Sharing , your Instructor will provide you with financial information to use for this part of the Assignment.

To complete this part, address the following:

· Using the Week 8 Assignment Template and the data provided by your Instructor in the  Doc Sharing  area, calculate the NPV, payback, IRR, and ARR.

· Note: In addition to submitting your work in Excel, include your calculations within your report by copying and pasting the information from Excel. 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  Links to an external site. . https://support.microsoft.com/en-us/office/insert-a-chart-from-an-excel-spreadsheet-into-word-0b4d40a5-3544-4dcd-b28f-ba82a9b9f1e1

· Analyze each of the alternatives based on your calculations and illustrate to the executive team which alternative should yield the highest return.

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