Homework: Net Present Value & Internal Rate of Return
For this homework, 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 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 Excel-showing all work and formulas-to compute the following:
o Compute the net present value of each project. Round your computations to 2 decimal points.
o 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:
o Analyze the results of the net present value calculations and the significance of these results, supported with examples.
o Determine which project should be adopted based on the net present value approach and provide rationale for your decision.
o Analyze the results of the internal rate of return calculation and the significance of these results, supported with examples.
o Determine which project should be adopted based on the internal rate of return approach and provide rationale for your decision.
o Determine the preferred method in the given circumstances and provide reasoning and details to support the method selected.
o Synthesize results of analyses and computations to determine the best investment opportunity to recommend to the president of Donovan Enterprises.
Format your homework according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.