Assignment:
Part 1
Ratio Analysis
Please respond to the following discussion topic. Your initial post should be a minimum of 150 words in length. Then, make at least two thoughtful responses to your fellow students' posts.
Describe the three categories of ratios used in ratio analysis. When working on assessing the company you chose, which of these ratios do you think is the most important indicator of successful performance, why?
Please include at least 2 references
Part 2
Retirement Planning
Please respond to the following discussion topic. Your initial post should be a minimum of 150 words in length. Then, make at least two thoughtful responses to your fellow students' posts.
Project your Social Security benefits at the organization's website. Many retirement plans suggest that you should create a lump sum of cash to generate enough interest income equal to about 80% of your current income. Calculate how much money you would have to save each month from now until retirement in order to achieve a lump sum large enough to yield interest income equal to 80% of your current income. How much would you need to save each month? Let's discuss.
If you would like some help with the time value of money calculations, Excel can be a very handy tool. The site below provides instructions on how to do time value of money calculations in excel:
https://support.content.office.net/en-us/coach/excelcoach_FV_PartI.html
Please include at least 2 references
Part 3
Capital Asset Pricing Model
Please respond to the following discussion topic. Your initial post should be a minimum of 150 words in length. Then, make at least two thoughtful responses to your fellow students' posts.
To CAPM or not to CAPM - that is the question. CAPM is a valuable tool that often comes under fire for all the estimates it relies upon. What are the key estimates used in CAPM? Why is this measure so harshly criticized? Do you agree with the critics? Why or why not?
Please include at least 2 references
Part 4
Which Project is Best?
Please respond to the following discussion topic. Your initial post should be a minimum of 150 words in length. Then, make at least two thoughtful responses to your fellow students' posts.
Assume ABC Company has chosen to invest in new manufacturing equipment. The initial cost of the equipment is $1,200,000. The equipment has a useful life of 20 years. The company uses straight-line depreciation. Their tax rate is 30%. Their weighted average cost of capital is 10%. The new equipment is expected to increase net cash flows by $500,000 in year 1, $350,000 in years 2 through 4, and $100,000 in years 5 through 10. Using all four investment assessment methods (IRR, ARR, NPV, or payback), perform the calculations for this project. Based on just ONE of your calculations should the project be accepted or rejected? Critique the results of the other three calculations you completed. Do they all support your accept/reject decision? Which assessment method is the best?
Please include at least 2 references