Files attached

Start Here - Introduction
        Welcome to TMV Comprehensive Project
        Chapter 5, 8, & 11 Concepts and Practices
        Table of Contents:
        Red Tab: Narrative of the Project Scope
        Green Tabs:Student Tabs to Insert Your Work.
        Instructions:
        Review the Project within the red tab in the workbook
        Work problems within the green tabs in this workbooks
        Save this workbook using your last name in the title of the file
        Submit your work via the Blackboard Assignment folder
Project Scope
    Project Evaluation and Risk Analysis
    Investment Opportunity: Manufacturing management wants to acquire new soap pressing equipment to support current products and anticipated future products that are in the development stage. Proposed capital investments are included in the annual budget. This includes the estimated cost of acquisition and the month the expenditure will be made. Once the request is formally submitted the approval process begins. As a member of the accounting and finance department your responsibilities include evaluation of proposed capital investments and risk assessment.
    The following information was included on the initial requisition:
    . Purchase Price: Estimated purchase price for the new equipment is $150 million. The investment will be made immediately after approval.
     Often the purchase price does not include all ancillary expenses that are necessary for installation of the equipment and must be included in the value.
     Part of your responsibility is to research these additional costs and make sure they are included in the requisition.
    . Company’s Depreciation Policy:
     - Equipment will be depreciated using the Straight-line method.
     - Equipment has an economic life of 5 years.
     - Equipment expected to have zero salvage value at the end of year 5. At that time the equipment will be obsolete and sold for scrap.
    . Cash Inflows: Based on your analysis project inflows are expected to be $65 million per year, beginning one year after installation of the new equipment is complete.
    . Cash Outflows: The new equipment will have extra cash outflows of $10 million per year beginning one year from today.
    . Tax Rate: The company’s estimated tax rate is 30%.
    . Required Return: The company will only invest in projects that yield a return it feels could be earned from other investment opportunities. The required return is 17%.
    Project Evaluation (Total 100 points)
    The company follows an evaluation method called ROCE (return on capital employed) which is a two-part method:
     ...