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(I check for plagiarism) Check the work on the attached assignment and write an executive summary outlining both the project choice and why. It must follow the proper essay format of intro-body-conclusion. It must be written from a leadership perspective, and should speak the the ethics involved in making the decision and the impact on shareholders. 1-2 pages double spaced.Below are the original assignment instructions. I’m attaching all necessary documentation as well.Capital Budgeting Case – From the given case information, calculate the firm’s WACC then use the WACC to calculate NPV and evaluate IRR for proposed capital budgeting projects with a capital rationing constraint. After you choose the project(s), recalculate the capital structure based on the assumption that the project(s) are implemented and determine if the new capital structure will signal the investors either positively, negatively, or not at all. Write a business report on your findings. Include an executive summary and appendices if applicable. See rubric for specific graded criteria. Click on the attached case info document and rubric for additional information.Accounting
Institution Affiliation
Student’s name
Instructor’s name
Date of submission
Weighted Cost of capital debt and equity = cost of common equity + cost of long term debt +
cost of preferred stock
= (0.25 *7%) + (19%*0.25) + (20% *0.50)
= 1.75% + 4.75% + 1%
= 7.5%
This weighted average cost then becomes the minimum interest rate that can be used for project
evaluation. Therefore, we use this to calculate the NPV, IRR, & payback period.
NPVA = (25,000/(1 + 0.075)^1 + 35,000/(1 + 0.075)^2 + 45,000/(1 + 0.075)^3 + 50,000/(1 +
0.075)^4 + 55000/(1 + 0.075)^5) less initial outlay
= (23255.8 + 30,286.6 + 36223.2 + 37440.0 + 38310.7) – 130,000
= 165,517 – 130,000
= 35,517
NPVB = (40,000/(1 + 0.075)^1 + 35,000/(1 + 0.075)^2 + 30,000/(1 + 0.075)^3 + 10,000/(1 +
0.075)^4 + 5000/(1 + 0.075)^5) less initial outlay
= (37209.3 + 30,286.6 + 24148.8 + 7,488 + 3482.8) – 85,000
= 72328.9 – 85,000
= – 12671.1
From the above findings, the project viable for investment is project A, since it has a positive
NPV. All projects with a negative NPV indicate that the cost for the stock will decline and
therefore should not be implemented.
IRR
Is the rate at which the sum net present values of all cash flows is equal to zero
0 = – C0 + C1(1 + IRR)1 + C2(1 + IRR)2 + C2(1 + IRR)3 + C3(1 + IRR)4 + C4(1 + IRR)5
Where Co – – – C4 represent the cash flows for the consecutive years
The IRR calculation will use the net present value of each year’s cash flow.
Let IRR be n
Project A
0
= – 130,000 + 23255.8(1 + n)1 + 30286.6(1 + n)2 + 36223.2(1 + n)3 + 37440(1 + n)4 +
38310.7(1 + n)5
= 7.57%
Project B
0
= – 85000 + 37209.3(1 + n)1 + 30286.6(1 + n)2 + 24148.8(1 + n)3 + 7488(1 + n)4 +
3482.8(1 + n)5
= 10.0075%
Using the IRR as the mode of analysis, the company should invest in project B since the internal
rate of return is higher than that of project A, and the minimum rate acceptable for investment.
Project B has a payback period of only 3 years, while project A has 5-year payback period.
However, it is not enough to use this method since there is a great difference in the initial cash
outlays for each project.
NEW WACC
= (7% * 0.2) + (19% * 0.2) + (20% 0.6)
= 1.4% + 3.8% + 1.2%
= 6.4%
The new WACC indicates that the market value of the debt and the stock price has a great impact
on the cost of capital invested in the projects. Changing the attention to the retained earnings and
contribution of the stakeholders to investment would actually make the cost of capital cheaper
and better returns consequently.
FIN300
Portfolio Project Scoring Rubric

Criteria
Meets Expectation
Content, Research, and Analysis

21‐25 Points
Requirements
The Portfolio
includes all of the
required
components, as
specified in the
assignment.

21‐25 Points
Content
Demonstrates
knowledge of the
materials; correctly
represents
knowledge from
sources.

33‐40 Points
Purpose of the
Purpose of the
Proposal
proposal is well
defined, supported
and articulated.

Explanation of
Financing

Approaches
Expectation
16‐20 Points
The Portfolio
includes most of
the required
components, as
specified in the
assignment.
16‐20 Points
Some significant
but not major
errors or omissions
in demonstration
of knowledge.
25‐32 Points
Statement of
purpose includes
significant but not
major flaws and
errors in definition,
support and
articulation.
49‐60 Points
37‐48 Points
Company’s WACC,  Small number of
capital structure,
significant but not
dividend policy if
major flaws in
applicable, and the  explanation of
reason for the
company’s WACC,
change in financing  capital structure,
are clearly
dividend policy if
explained.
applicable, and the
Alternatives that
reason for the
meet the
change in financing
company’s
are present.
expectations for
Alternatives that
increasing
meet the
shareholder value  company’s
are presented.
expectations for

increasing
shareholder value
Below Expectation
Limited Evidence
11‐15 Points
The Portfolio
includes some of
the required
components, as
specified in the
assignment.
11‐15 Points
Major errors or
omissions in
demonstration of
knowledge.
6‐10 Points
The Portfolio
includes few of the
required
components, as
specified in the
assignment.
6‐10 Points
Fails to
demonstrate
knowledge of the
materials.
17‐24 Points
Statement of
purpose includes
major flaws and
errors in definition,
support and
articulation.
9‐16 Points
Statement of
purpose is not
defined,
supported, and
articulated.
25‐36 Points
Major problems in
organization and
writing Company’s
WACC, capital
structure, dividend
policy if applicable,
and the reason for
the change in
financing are
present.
Alternatives that
meet the
company’s
expectations for
increasing
shareholder value
are poorly
13‐24 Points
Fails to explain
company’s WACC,
capital structure,
dividend policy if
applicable, and the
reason for the
change in
financing.
Alternatives that
meet the
company’s
expectations for
increasing
shareholder value
are not presented.

FIN300
Portfolio Project Scoring Rubric

Report or
Presentation
Structure

Quantitative
Calculations

Common Core

Critical Thinking

Ethics

are somewhat
explained.
49‐60 Points
37‐48 Points
Quantitative
Quantitative
findings are clearly  findings are stated
stated and well
and somewhat
integrated into the  integrated into the
written report or
written report or
presentation.
presentation.
Executive summary  Executive summary
is complete and
is complete and
one page or less.
one page or less
49‐60 Points
37‐48 Points
WACC (NPV and
WACC (NPV and
IRR, if applicable)
IRR, if applicable)
are included and
are included with
calculated
some significant
correctly. Financing  but not major
and other
errors. Financing
calculations are
and other
included and
calculations are
correct.
included with 1 or

2 errors.
explained.

25‐36 Points
Quantitative
findings are poorly
stated and not well
integrated into the
written report or
presentation.
Executive summary
is deficient.

25‐36 Points
WACC (NPV and
IRR, if applicable)
are included with
major errors.
Financing and
other calculations
are included with 3
or 4 errors.

5 Points
Applies critical
thinking and
reasoning skills for
effective analysis.
3 Points
Includes major
flaws or omissions,
or numerous minor
flaws, in
application of
critical thinking
skills.
3 Points
Includes major
flaws or omissions,
or numerous minor
flaws, in
prescribing actions
situations.
3 Points
Includes major
flaws or omissions,
or numerous minor
flaws, in
4 Points
Small number of
significant but not
major flaws or
omissions in
application of
critical thinking
skills.
5 Points
4 Points
Prescribes actions  Small number of
to effectively
significant but not
address a variety of  major flaws or
ethical situations
omissions in
that support social  prescribing actions
responsibility.
situations.
5 Points
4 Points
Demonstrates
Small number of
and teamwork
major flaws or
skills.
omissions in
13‐24 Points
Quantitative
findings are not
present or
incorrect in the
written report or
presentation.
Executive summary
is deficient or
absent.
13‐24 Points
WACC (NPV and
IRR, if applicable)
are not included.
Financing and
other calculations
are absent or
included with 5 or
more errors.

2 Points
Critical thinking
and reasoning skills
are absent or
ineffective.
2 Points
Prescription of
ethical situations is
absent or
ineffective.
2 Points
Demonstration of
teamwork skills is
absent or
FIN300
Portfolio Project Scoring Rubric

Technology
5 Points
Selects current
technology
applications and
applies to specific
problems and
challenges in the
work place and
professional skills.
Mechanics and Writing

17‐20 Points
Organization
Project is clearly
organized, well
written, and in
proper essay
format including an
introduction, body,
and conclusion.
Conforms to
project
requirements.

17‐20 Points
Grammar and
Strong sentence
Style
and paragraph
structure; few or
no minor errors in
grammar and
spelling;
appropriate writing
style; clear and
concise with no
unsupported

17‐20 Points
demonstration of
teamwork skills.
4 Points
Small number of
significant but not
major flaws or
omissions in
selection of current
technology
applications.

demonstration of
teamwork skills.
3 Points
Includes major
flaws or omissions,
or numerous minor
flaws, in selection
of current
technology
applications.
ineffective.
13‐16 Points
Small number of
significant but not
major flaws in
organization and
writing; is in proper
essay format. In a
minor way does
not conform to
project
requirements.
13‐16 Points
Small number of
significant but not
major errors in
grammar and
spelling; generally
appropriate
writing.
9‐12 Points
Major problems in
organization and
writing; does not
completely follow
proper essay
format. In a
significant way
does not conform
to project
requirements.
9‐12 Points
Inconsistent to
sentence and
paragraph
development; work
needed on
grammar and
spelling; does not
meet program
expectations.
5‐8 Points
Project is not well
organized or well
written and is not
in proper essay
format. Does not
conform to project
requirements.
13‐16 Points
9‐12 Points
5‐8 Points
2 Points
Selection of current
technology
applications is
absent or
ineffective.
5‐8 Points
Poor quality;
unacceptable in
terms of grammar
and/or spelling;
inappropriate
writing style that
interferes with
clarity.
FIN300
Portfolio Project Scoring Rubric

APA
Includes all items
listed on APA rubric
and includes less
than two APA style
guide mistakes
within the paper
itself. Citations and
reference page are
correctly
formatted.
Total points possible = 350

Omits up to two
items listed on APA
rubric and includes
less than four APA
style guide
mistakes within the
paper itself.
Citations and
reference page are
correctly formatted
with minor
mistakes.
Omits up to four
items listed on APA
rubric and includes
less than six APA
style guide
mistakes within the
paper itself.
Citations and
reference page
include numerous
mistakes.
Omits five or more
items listed on APA
rubric and includes
seven or more APA
style guide
mistakes within the
paper itself.
Citations and
reference page are
incorrectly
formatted.

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