Budget Monitoring And Format IP2 –Need In 4 Hours!!!!
For this assignment, you need to develop a capital budget. It is important to know what the cafe managers should consider within their capital budget. You must also define the key terms necessary to understand capital budgeting. In this assignment, please show all work, including formulae and calculations used to arrive at financial values. You must answer the following:
- Using the information in the assignment description:
- Prepare a capital budget for the Hot New Cafe with the net cash flows for this project over a 5-year period.
- Calculate the payback period (P/B) and the net present value (NPV) for the project.
- Answer the following questions based on your P/B and NPV calculations:
- Do you think the project should be accepted? Why?
- Define and describe Net Present Value (NPV) as it pertains to the new cafe.
- Define payback period. Assume the company has a P/B (payback) policy of not accepting projects with life of over 3 years. Do you think the project should be accepted? Why?
- Your submitted assignment must include the following:
- A double-spaced, two-page Word document that contains answers to the word questions.
- You must include a Microsoft Excel spreadsheet for your calculations.
- Either the Word document or the Excel spreadsheet must have all of your calculation values, your complete calculations, any formulae that you used, the sources you wish to cite, and your answers to the questions listed in the assignment guidelines.
Predict some budgeting issues, including format and budget monitoring.
Calculate the cost of capital, capital budgeting, debt instruments, and markets.