[Solved] Assessment 2 Evaluation of Capital Projects 5014

Assignment Prompt & Instructions

Use the resources linked below to help complete this assessment. Collapse All ## **Time Value of Money and Calculations** The following resources may be useful in learning about time value of money (TVM) and how to calculate TVM in Excel: – Alexander, M., & Kusleika, D. (2016). [_Excel 2016 formulas._](https://ebookcentral-proquest-com.library.capella.edu/lib/capella/detail.action?docID=4205843#) John Wiley & Sons, Inc. – You will find explanations on using Excel to calculate financials in these chapters: – Chapter 11, "Borrowing and Investing Formulas." – Chapter 12, "Discounting and Depreciation Formulas." – Chapter 13, "Financial Schedules." – Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2021). _Corporate finance: Core principles and applications_ (6th ed.). McGraw-Hill. _**Available in the courseroom via the VitalSource Bookshelf link.**_ – Chapter 4, "Discounted Cash Flow Valuation," pages 82-128. – Schmidt, C. E. (2016). [A journey through time: From the present value to the future value and back or: Retirement planning: A comprehensible application of the time value of money concept.](http://library.capella.edu/login?qurl=https%3A%2F%2Fsearch.proquest.com%2Fdocview%2F1804900771%3Faccountid%3D27965 "Select this link to launch this material in a new window.") _American Journal of Business Education_, _9_(3), 137-143. – [Time Value of Money](http://media.capella.edu/CourseMedia/NPL7304/TimeValue/wrapper.asp "Select this link to launch this material in a new window.") | [Transcript](http://media.capella.edu/CourseMedia/NPL7304/TimeValue/transcript.html "Select this link to launch this material in a new window."). – This presentation discusses the components that make up time value of money. The presenter also provides examples to compute and read the computations. – Mayes, T. R. (n.d.). [Microsoft Excel as a financial calculator part I.](http://www.tvmcalcs.com/index.php/calculators/excel_tvm_functions/excel_tvm_functions_page1/ "Select this link to launch this material in a new window.") http://www.tvmcalcs.com/index.php/calculators/excel_tvm_functions/excel_tvm_functions_page1/ – Skillsoft. (n.d.). [Financial statement analysis for non-financial professionals.](https://capella.skillport.com/skillportfe/custom/login/saml/login.action?courseaction=launch&assetid=fin_08_a04_bs_enus "Select this link to launch this material in a new window.") – Go to the Analyzing the Financial Statement section in the Table of Contents menu, and select **The Time Value of Money**. ## **Discounted Cash Flow Valuation** – Seeking Alpha. (2016, March 28). [Does Warren Buffett use discounted cash flow?](https://seekingalpha.com/instablog/5969741-the-value-pendulum/4868716-warren-buffett-use-discounted-cash-flow "Select this link to launch this material in a new window.") https://seekingalpha.com/instablog/5969741-the-value-pendulum/4868716-warren-buffett-use-discounted-cash-flow – Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2021). _Corporate finance: Core principles and applications_ (6th ed.). McGraw-Hill. _**Available in the courseroom via the VitalSource Bookshelf link.**_ – Chapter 4, "Discounted Cash Flow Valuation," pages 82-128. ## **Impacts to Common Stock Prices** – Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2021). _Corporate finance: Core principles and applications_ (6th ed.). McGraw-Hill. _**Available in the courseroom via the VitalSource Bookshelf link.**_ – Chapter 6, "Stock Valuation," pages 164-193. Find out how the valuation of these securities determines the ultimate value of the entire enterprise. – Edspira. (n.d.). [_Capital stock (common stock and preferred stock)_](https://www.youtube.com/watch?v=TZ2uWgtQXBo "Select this link to launch this material in a new window.") [Video] | [Transcript](http://media.capella.edu/CourseMedia/MBA-FPX5014/transcripts/CapitalStock_transcript.asp "Select this link to launch this material in a new window.") https://www.youtube.com/watch?v=TZ2uWgtQXBo – TheFinCoach. (2012). [_Session 08: Objective 1 – common stock valuation_](https://www.youtube.com/watch?v=uajW4BWh_zY "Select this link to launch this material in a new window.") [Video] | [Transcript](http://media.capella.edu/CourseMedia/MBA-FPX5014/transcripts/Session8Obj1_transcript.html "Select this link to launch this material in a new window.") https://www.youtube.com/watch?v=uajW4BWh_zY – Harper, D. (2018, February 18). [Forces that move stock prices.](https://www.investopedia.com/articles/basics/04/100804.asp "Select this link to launch this material in a new window.") https://www.investopedia.com/articles/basics/04/100804.asp ## **Bond Valuation** – Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2021). _Corporate finance: Core principles and applications_ (6th ed.). McGraw-Hill. _**Available in the courseroom via the VitalSource Bookshelf link.**_ – Chapter 5, "Interest Rates and Bond Valuation," pages 129-163. This chapter illustrates the employment of time value of money concepts to determine the value of corporate debt/bonds and common/preferred stock. – McCracken, M. (n.d.). [_Bond valuation_](http://www.teachmefinance.com/bondvaluation.html "Select this link to launch this material in a new window.") [Video] | [Transcript](https://media.capella.edu/CourseMedia/MBA-FPX5014/transcripts/BondValuation.asp "Select this link to launch this material in a new window.") http://www.teachmefinance.com/bondvaluation.html ## **Capital Budgeting Tools** – Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2021). _Corporate finance: Core principles and applications_ (6th ed.). McGraw-Hill. _**Available in the courseroom via the VitalSource Bookshelf link.**_ – Chapter 7, "Net Present Value and Other Investment Rules," pages 194-228. This chapter introduces the process of capital budgeting, which determines the value of a potential investment/project to a firm. That is, it weeds out good investments from the bad. Evaluating capital budget projects is a critical function for any business professional involved with finance decisions. – Chapter 8, "Making Capital Investment Decisions," pages 229-261. The key to valuation of investments and projects is the cash they generate. This chapter illustrates the way to figure the all-important cash flows from investment projects. – Van Dalsem, S. (2017). [_Capital budgeting cash flows tutorial_](https://www.youtube.com/watch?v=X6HvKl__rLY&t=19s "Select this link to launch this material in a new window.") [Video] | [Transcript](https://media.capella.edu/CourseMedia/MBA-FPX5014/transcripts/CapitalBudgetingCashFlows_transcript.asp "Select this link to launch this material in a new window.") https://www.youtube.com/watch?v=X6HvKl__rLY&t=19s – View the segment, 12:36-27:36. ## **Capital Budgeting and Risk** – Nockolas, S. (2015). [How do you calculate payback period using Excel?](https://www.investopedia.com/ask/answers/051315/how-do-you-calculate-payback-period-using-excel.asp "Select this link to launch this material in a new window.") https://www.investopedia.com/ask/answers/051315/how-do-you-calculate-payback-period-using-excel.asp – Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2021). _Corporate finance: Core principles and applications_ (6th ed.). McGraw-Hill. _**Available in the courseroom via the VitalSource Bookshelf link.**_ – Chapter 9, "Risk Analysis, Real Options, and Capital Budgeting," pages 262-286. The concept of risk is introduced in this chapter. Risk is an important aspect of business and investment, and the impact of risk needs to be measured on all capital projects. – Sham, G. (n.d.). [Capital budgeting: Wrapping it all up.](https://www.investopedia.com/university/capital-budgeting/conclusion.asp "Select this link to launch this material in a new window.") https://www.investopedia.com/university/capital-budgeting/conclusion.asp ## **Additional Resources for Further Exploration** – Finance and Accounting Videos by Prof Coram. (n.d.). [_Profitability index calculation using Excel_](https://www.youtube.com/watch?v=1CcRIdUU3sw "Select this link to launch this material in a new window.") [Video] | [Transcript](https://media.capella.edu/CourseMedia/MBA-FPX5014/transcripts/ProfitabilityIndex_transcript.asp "Select this link to launch this material in a new window.") https://www.youtube.com/watch?v=1CcRIdUU3sw – Financecanbefun. (2014). [_Capital budgeting in Excel example_[Video]](https://www.youtube.com/watch?v=Twpfr2VCIWE "Select this link to launch this material in a new window.") | [Transcript](http://media.capella.edu/CourseMedia/MBA-FPX5014/transcripts/CapitalBudgetingInExcel_transcript.asp "Select this link to launch this material in a new window.") https://www.youtube.com/watch?v=Twpfr2VCIWE – View the segment 1:53-16:53.