Your Perfect Assignment is Just a Click Away

We Write Custom Academic Papers

100% Original, Plagiarism Free, Customized to your instructions!

glass
pen
clip
papers
heaphones

Rasmussen College Evaluating Investment Opportunities Paper

Rasmussen College Evaluating Investment Opportunities Paper

Question Description

I’m working on a finance report and need a sample draft to help me study.

Part 1

Background

Appropriately allocating financial resources is perhaps the most significant consideration in the field of finance. Capital budgeting is one of the central considerations that must be factored into the allocation process. Capital budgeting can be defined as the decision to make an investment based on the company’s financial resources.

Generating a return is the desired outcome of any investment. A company’s rate of return is determined by several factors including the length of the time required to attain the return, riskiness of the investment, and the dollar amount of the return. There are several types of capital investments for which companies can allocate their resources. Examples include maintenance projects, cost-saving projects, new business, and production enhancement.

Instructions

In your role as a senior financial analyst for Capital Financial, you are told the remaining budget to invest in a cost-saving project is $2.5 million. You have identified two opportunities that warrant in-depth analysis, and you will consider the cash flow from the following two projects (Project A and Project B) in your report.

  • Year 0
  • Project A: -750,000
  • Project B: -2,400,000
  • Year 1
  • Project A: 360,000
  • Project B: 1,700,000
  • Year 2
  • Project A: 420,000
  • Project B: 800,000
  • Year 3
  • Project A: 340,000
  • Project B: 850,000

After completing your analysis, write a formal business letter to the CEO and Board of Directors explaining your findings. Be sure to address the following:

  1. Calculate and include the IRR and NPV for the cash flows of both projects.
  2. Explain which project has the highest IRR and why this is important.
  3. Describe which project has the highest NPV and whether it is consistent with the IRR rule.
  4. Summarize the analysis of both projects, focusing on the pros and cons of each project, include your calculations for support in the business letter.
  5. Develop a persuasive argument using the calculations and data to support your recommendation for the project that should be pursued by the company.

Part 2

The insufficient management of credit risk primarily drove the subprime meltdown in the late 2000’s. Financial institutions issued loans to individuals and entities that lacked the income to meet their debt obligations. Further, many of the individuals/entities to whom loans were made were outside of standard parameters for creditworthiness.

  1. What are the consequences of firms failing to perform the proper due diligence to manage credit risk sufficiently?
  2. In your opinion, what would be the best financial metrics to identify credit risk?
  3. In your opinion, which stakeholder (firms, employees, shareholders, debt holders, or society as a whole) is most adversely impacted by the above conditions?

Order Solution Now

Our Service Charter

1. Professional & Expert Writers: Gold Grades only hire the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Gold Grades are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Gold Grades is known for timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Gold Grades, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.