Analyze key aspects of managerial accounting and capital budgeting to drive effective business decisions.

Assessment Information

In this assessment, you’ll take on the role of Senior Accountant and use your knowledge of net present value and internal rate of return to identify the best investment opportunity for your company.

You will be able to submit this assessment after you’ve completed the Competency 1 Reflection. Save and upload each part of the assessment as a separate file and title the files so it’s clear to see what part of the assessment they serve. Include your name in your documents on the first page, upper left.

Assessment Directions

Net Present Value and Internal Rate of Return

Investment Opportunities Scenario

Review the scenario and complete the activity that follows. This scenario can also be found in the “Problems – Series A” section 10-19A of Ch. 10, “Planning for Capital Investments” of Fundamental Managerial Accounting Concepts.

Dwight Donovan, the president of Donovan Enterprises, is considering 2 investment opportunities. Because of limited resources, he will be able to invest in only 1 of them.

Project A is to purchase a machine that will enable factory automation; the machine is expected to have a useful life of 4 years and no salvage value.

Project B supports a training program that will improve the skills of employees operating the current equipment. Initial cash expenditures for Project A are $400,000 and for Project B are $160,000. The annual expected cash inflows are $126,000 for Project A and $52,800 for Project B.

Both investments are expected to provide cash flow benefits for the next 4 years. Donovan Enterprises’ desired rate of return is 8%. Your task as Senior Accountant is to use your knowledge of net present value and internal rate of return to identify the preferred method and best investment opportunity for the company and present your results to Dwight Donovan.

Use Excel®—showing all work and formulas—to compute the following:

  • The net present value of each project. Round your computations to 2 decimal points.
  • The approximate internal rate of return for each project. Round your rates to 6 decimal points.

Continue to Presentation tab for details.


Create an 8- to 10-slide presentation showing the comparison of the net present value approach with the internal rate of return approach that you calculated.

Complete the following in your presentation:

  • Analyze the results of the net present value calculations and the significance of these results, supported with examples.
  • Determine which project should be adopted based on the net present value approach and provide rationale for your decision.
  • Analyze the results of the internal rate of return calculation and the significance of these results, supported with examples.
  • Determine which project should be adopted based on the internal rate of return approach and provide rationale for your decision.
  • Determine the preferred method in the given circumstances and provide reasoning and details to support the method selected.
  • Synthesize results of analyses and computations to determine the best investment opportunity to recommend to the president of Donovan Enterprises and provide rationale for your recommendation.
  • Include detailed speaker notes.
Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more