Graded Discussion Board
Financial management (MGT201)
Dear Students!
This is to inform that Graded Discussion Board (GDB) No. 01 opening Date June 01, 2015 for discussion and last date for posting your discussion will be June 03, 2015.
Topic/Area for Discussion
“Capital Budgeting”
This Graded Discussion Board will cover lesson 01 to 14.
Learning Objectives
To improve understanding regarding major criteria of capital budgeting and practical view of NPV and equivalent annuity approach in real life.
Scenario
Sufi Bakers - a growing food processing firm in Pakistan having high market share is planning to invest further in its baking facility to gain more market share. The firm’s finance manager has identified the following two independent proposals accompanied by the related cash flows:
Proposal
|
Life (Yrs.)
|
Discount Rate
|
Co
|
C1
|
C2
|
NPV
|
Rs. in Lac
| ||||||
A
|
2
|
11%
|
80
|
52
|
61
|
16.09
|
B
|
1
|
72
|
88
|
-
|
7.27
| |
Requirement
Considering the above information, answer the following:
1) Is the available information is sufficient enough to decide on any proposal” If not, what other information would like to include in the above?
Considering the above information, answer the following:
1) Is the available information is sufficient enough to decide on any proposal” If not, what other information would like to include in the above?
2) Using the given information in the above table only, select the proposal giving appropriate support to your selection?
Note: Necessary calculations must be provided.
Important Instructions:
- Solution must be provided in the recommended format
- Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
- Obnoxious or ignoble answer should be strictly avoided.
- Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over
