A Letter to the Board of Directors.
I’m studying and need help with a Accounting question to help me learn.
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***Utilize resources attached and use the scenerio for assignment.
Decisions involving capital expenditures often require managers to weight the costs and benefits of different options related to the same goal or project. For instance, deciding whether to replace, repair, or do nothing to existing equipment is a capital expenditure decision that involves calculations, projections, and deliberations. Managers must be able to quantitatively analyze different options for capital expenditures to make the best decisions for their organization.
For this Assignment, review the information in the scenario posted in the entry titled Week 3 Assignment located in the Doc Sharing link. You will utilize the information in this week’s Resources and media to make a recommendation in regard to a capital expenditure. There is also an Excel template provided in the same entry that you may find helpful in completing this Assignment.
The Assignment:
- Part 1: Prepare a spreadsheet using Excel or a similar program in which you compute the following for each proposed location.
- Accounting rate of return on investment
- Payback
- Net present value
- Internal rate of return
Note: Be sure to view the media for this week before starting this Assignment.
- Part 2: Utilizing Word or another word processing software program, prepare a written report for the Board of Directors. The intended audience is clear from the salutation and the language used throughout the report.
- Include a detailed and thorough explanation of the conclusion you reached regarding the feasibility of each proposal supported by the calculations prepared in Part 1.
- Explain at least five non-financial items (e.g., culture, language, etc.), which may impact the perceived desirability of each location.
- Select the one location you recommend the Board invest in. Explain your rationale in precise and detailed language.