Efb210 Essay

611 Words Apr 20th, 2014 3 Pages
EFB210: FINANCE 1, 2014 S1 Capital Budgeting Report and Analysis ___________________________________________________________________________________
General Information
Marks: 25
Weight: 25%
Format: Report and Analysis
Due: 8 May 2014
Submission: Submit report with CRA matrix to Assignment Minder. Note that you need to attach the Assignment Minder ‘assignment cover sheet’ to the front of the document wallet.
Submit Excel analysis file by either: * (Preferred) uploading your file to the Finance 1 Assignment portal in Blackboard, or * Submit USB or CD containing the Excel file with your report to Assignment Minder. If using this method, you must ensure that the USB or CD is securely attached inside the document
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* The report to be written such that it can be understood by a person with limited understanding of financial analytical tools. Furthermore, the report is to be no more than 600 words and it should include sections: Summary, Methodology, Recommendations and Limitations. * The analysis and report should also examine whether the recommendations change if there was no need to replace the car’s battery in years 2 and 4.
In order to prepare your analysis and report, the owner has provided information in regards to the Camry Hybrid’s revenue and costs, and the company’s required rate of return (refer to Table 1).
Table 1: Taxi Analysis Information Year | 0 | 1 | 2 | 3 | 4 | 5 | 61 | Outlay | $35,000 | | | | | | | Annual Maintenance | | $1,000 | $1,000 | $1,500 | $1,500 | $2,000 | $2,000 | Battery Replacement2 | | | $3,000 | | $3,000 | | | Depreciation | In Year 1, depreciation is $5,000 plus 15% of the asset’s outlayFrom Year 2, depreciation is either * 30% of the asset’s book value; or * if the asset’s book value is less than $6,500, depreciation is the asset’s book value (i.e. asset is depreciated to zero once book value < $6,500) | Salvage | | $20,000 | $15,000 | $10,000 | $8,000 | $5,000 | $2,000 | Revenue | | $180,000 | $180,000 | $180,000 |

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