Assignment 2: LASA 1—Capital Budgeting and Dividend Policies

week_2_template.xls

M3, Assign2


Module 3, Assignment 2 Template						I left some of these filled in as guidance.
			8%
Project	After TaxCash Flows/Year	Length of Project	Cost		Solution
A	$ 2,300.00	5	$ 8,000.00	#'s 1 and 2	NPVa =	$1,183.23	$1,183.23
B					IRRa =	13.46%	($0.34)
C
D					NPVb =	1xxx.13
					IRRb	1x.xx%
Year	Income After Taxes				NPVc =	xxxx.59
1	$ 6,000.00				IRRc	xx.x%
2
3					NPVd =	$ - 0
4					IRRd	xx.x%
				#3
				#4	Maintaining Current Diviend Per Share
				Year	After Tax Income	Dividend	Capital Expenditure	External Funding Required
				1	$ 6,000.00	$ 4,000.00	$ 8,000.00	$ 6,000.00
				2
				3
				4			$ - 0	$ - 0
								$ 6,000.00
				#5	Maintaining a 50% Payout Ratio
				Year	After Tax Income	Dividend	Capital Expenditure	External Funding Required
				1	$ 6,000.00	$ 3,000.00	$ 8,000.00	$ 5,000.00
				2
				3
				4			$ - 0	$ - 0
								$ 5,000.00
				#6	Considering the Dividend Decision is a Residual Decision
				Year	After Tax Income	Dividend	Capital Expenditure	External Funding Required
				1	$ 6,000.00	$ - 0	$ 8,000.00	$ 2,000.00
				2		$ - 0
				3		$ - 0
				4			$ - 0	$ - 0
								$ 2,000.00