Create atwo-page single space memorandum plus appendices about a sports
bar wanting to open downtown in an urban area that’s open 7 days a week
creating a capital budgeting project using capital budgeting analysis.
Collect relevant data, research relevant information regarding implementation
of the project and perform the necessary analysis to determine if the project
should be undertaken.It may be appropriate to keep the project
simple so that it is tractable. It is
also true that too simple of a project would not reflect well on your ability
depth of financial analysis.
Follow the computational part of
the case:
1) Initial cash flows, operating cash flows and
terminal cash flow.
2) Payback; IRR; NPV; NPV profile.
3) Sensitivity analysis
4) Be clear regarding how the project is to be finance
and integrate inflation into your analysis.
5) Summarize what type of capital budgeting project
you are considering
6) How will the project be financed? What is the cost
of capital for you project – what is this number based on? What is your WACC
for your project?
This
assignment should build on what you know associated with accounting, valuation,
spread sheets and investment.
The memorandum should contain at least 4
sections:
1) Contain
an introduction
2) Provide
any necessary explanation and background to understand the project.
3) Summarize
the results that are included in the appendix.
The writer should reference key computations including calculations 1-4
outlined above.
4) Provide
some type of concluding comments.
It is
expected that you turn in will be able to be accessed by me with Microsoft Word
and/or Excel. Two page maximum
(single-spaced) applies to the memorandum (the excel files can contain many
pages). Neatness counts. Late papers will be penalized at least 30%.
The memo
will be graded based on the following:
1) Completeness and Accuracy of Attachments: ________
out of 25
(Contain the required
computations and financial analysis)
2) Written content of the memorandum: _________out of 25
(logic of presentations; ability to
effectively integrate computations into written memo)
3) Grammar, spelling, punctuation and
appearance (self
explanatory) __________ out of 15
4) Financial Reasoning of the analysis __________ out of 35
(correct use of finance concepts)
**NOTE: PLAGIARISM IS NOT TOLERATED!! YOU
MAY NOT SUBMIT OLD PROJECTS FROM ANOTHER COURSE, OUT OF ATEXTBOOK BY CHANGING
FIGURES, OR OFF THE INTERNET…ITWILL BE CHECKED. PLEASE BE ORIGINAL!!
