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For this assignment, refer to the scenario located in “Problems – Series A” section 10-19A of Ch. 10, “Planning for Capital Investments” of Fundamental Managerial Accounting Concepts. This scenario puts you at the task as a Senior Accountant for Donovan Enterprises to identify the preferred method and best investment opportunity for the company.
Read the scenario in the textbook and complete the activity below.
Use Microsoft® Excel®—showing all work and formulas—to compute the following:
- Compute the net present value of each project. Round your computations to 2 decimal points.
- Compute the approximate internal rate of return for each project. Round your rates to 6 decimal points
Create a PowerPoint® presentation showing the comparison of the net present value approach with the internal rate of return approach calculated above. Complete the following in your presentation:
- Analyze the results of the net present value calculations and the significance of these results, supported with examples.
- Determine which project should be adopted based on the net present value approach and provide a rationale for your decision.
- Analyze the results of the internal rate of return calculation and the significance of these results, supported with examples.
- Determine which project should be adopted based on the internal rate of return approach and provide a rationale for your decision.
- Determine the preferred method in the given circumstances and provide reasoning and details to support the method selected.
- Synthesize results of analyses and computations to determine the best investment opportunity to recommend to the president of Donovan Enterprises.
Cite references to support your assignment.
Format your citations according to APA guidelines.
Table of Contents
The following document provides some guidelines on how to do the third paper. Note that the approach is based on that set out in the textbook on pages 40-41.
But first, a few formatting and submission requirements.
- Submit the papers in Microsoft Word
- Documents should be written in single space, 11 or 12 point, and use a professional font e.g. Arial, Calibri, Times New Roman
- Use endnotes, not footnotes
- Make sure the group specifies which group members did which sections
Here are the main aspects that I would like you to cover in relation to your companies for this third assignment.
Of the external (EFAS) and internal (IFAS) factors listed in Assignments 1 & 2, which are the strategic (most important) factors that strongly affect the corporation’s present and future performance? Discuss these
Create an SFAS table – look at the guidelines posted on Canvas.
[Approx. 2 pages]
- Are the current mission and objectives appropriate in light of the key strategic factors and problems?
- Should the mission and objectives be changed? If so, how?
- If they are changed, what will be the effects on the firm?
[Approx. ½ to 1 page]
- Can the current or revised objectives be met through more careful implementation of those strategies presently in use (for example, fine-tuning the strategies)?
- What are the major feasible alternative strategies available to the corporation? What are the pros and cons of each? Can corporate scenarios be developed and agreed on? (Alternatives must fit the natural physical environment, societal environment, industry, and corporation for the next three to five years.)
- Consider stability, growth, and retrenchment as corporate strategies.
- Consider cost leadership and differentiation as business strategies.
- Consider any functional strategic alternatives that might be needed for reinforcement of an important corporate or business strategic alternative.
[Approx. 4-6 pages]
- Specify which of the strategic alternatives you are recommending for the corporate, business, and functional levels of the corporation. Do you recommend different business or functional strategies for different units of the corporation?
- Justify your recommendation in terms of its ability to resolve both long-and short-term problems and effectively deal with the strategic factors.
- What policies should be developed or revised to guide effective implementation?
- What is the impact of your recommended strategy on the company’s core and distinctive competencies?
[Approx. 2-3 pages]