Assume that you have received a capital expenditure request for $52,000 for plant equipment and that you are required to do a justification analysis using capital budgeting techniques. The companyâ€™s cost of capital is 12% and the equipment (investment) is expected to generate net cash inflows of $13,000 per year for 8 years and then $9,000 for one year.
You are to calculate and explain your quantitative calculations of each of the four capitalbudgeting techniques listed, then, based upon these calculations, write a summary that provides a justification to proceed or not proceed with the project.
 Calculate the projectâ€™s net present value (NPV).
 Calculate the projectâ€™s internal rate of return (IRR).
 Calculate the projectâ€™s profitability index.
 Calculate the projectâ€™s discounted payback period.
 Recommend whether the project should be accepted or rejected and explain why.
To complete this assignment, submit an Excel file with your time value calculations, and a twopage paper that explains the calculations and provides your recommended decision and explanation of why that decision is recommended. The paper must be submitted as a Word document and it must follow APA style guidelines.
By February 19, 2013.
Assignment 3 Grading Criteria 
Maximum Points

Calculated NPV correctly. 
16

Calculated IRR correctly. 
16

Calculated Profitability Index correctly. 
12

Calculated Discounted Payback correctly. 
12

Recommended and explained a logical decision. 
16

Used Excel function tools properly. 
16

Writing Craftsmanship, APA and Ethical Scholarship. 
12

Total: 
100
