members without the lecturer’s permission


ASSESSMENT DESCRIPTION:
Students are required to work in agroup of 3 -5 students and must register for their group with the lecturer in week
4 and 5 and are not allowed to change group members without the lecturer’s permission. Students need to
analyse the following calculation based business scenario and present the finding in a form of business report;
methods of calculations need to be presented. Note: Refer to ALS guideline on preparing a business report.
Contact Manufacturing Ltd is considering two alternative investment proposals. The first proposal calls for
a major renovation of the company’s manufacturing facility. The second involves replacing just a few
obsolete pieces of equipment in the facility. The company will choose one project or the other this year,
but it will not do both. The cash flows associated with each project appear below and the firm discounts
project cash flows at 15%.
Year
Renovate
Replace
0
1
-$2,400,000
2,000,000
800,000
2
-$9,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
3
200,000
4
200,000
200,000
5
.
.
.
Assignment
1 Calculate the payback period of each project and based on this criterion, indicate which project you
would recommend for acceptance.
2.
Calculate the net present value (NPV) of each project and based on this criterion, indicate which
project you would recommend for acceptance.
1200)
3
Calculate the internal rate of return (IRR) of each project and based on this criterion, indicate which
project you would recommend for acceptance.
4.
Calculate the profitability index (PI) of each project and based on this criterion, indicate which
project you would recommend for acceptance.
5.
Overall, you should find conflicting recommendations based on the various criteria. Why is this
occurring?
6 Chart the NPV profiles of these projects. Label the intersection points on the x-and y-axes and the
crossover point.
7.
Based on this NPV profile analysis and assuming the WACC is 15%, which project would you
recommended for acceptance? Why?

Based on this NPV profile analysis and assuming the WACC is 25%, which project is recommended?
Why?
.
.
.
9.
Discuss the important elements to consider when deciding between these two projects.
ASSESSMENT SUBMISSION:
This is a group activity and students are required to work with their respective group members. No individual
submission will be accepted.
You will not receive any marks for this assignment if your group members collectively report against you for
non-participation or non-cooperation. You have to nominate someone as your group leader to coordinate the
assignment submission. The report will be submitted online in Moodle by one member of the team ONLY on
or before to the deadline.
Assessment Brief
Version 2: 11th October, 2019
Kent Institute Australia Pty. Ltd.
ABN 49 003 577 302 CRICOS Code: 00161E RTO Code: 90458
TEQSA Provider Number: PRV12051
Page 2 of 4

Private and Confidential

Yours all information is private and confidential; it is not shared with any other party. So, no one will know that you have taken help for your Academic paper from us.



This essay is written by:

Prof. Amanda Verified writer

Finished papers: 435

Proficient in:

English, History, Business and Entrepreneurship, Nursing, Psychology, Management

You can get writing help to write an essay on these topics
100% plagiarism-free

Hire This Writer
© 2017 theacademicessays. All Rights Reserved. Design & Developed by theacademicessays.

Ask Your Homework Today!

We have over 1000 academic writers ready and waiting to help you achieve academic success

CLICK HERE TO GET ORIGINAL ANSWERS FROM WRITERS

WhatsApp
Hello! Need help with your assignments?
Loading...