Investment Decision. Analyze the following scenario: Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,200,000 if purchased today and will generate the following cash disbursements and receipts. Should Duncombe pursue the investment if the cost of capital is 8 percent? Why? Clearly label your calculations in your analysis. Use 1-2 references
Year Cash Receipts Cash Disbursements Net Cash Flow 1 1,000,000 500,000 500,000 2 925,000 475,000 450,000 3 800,000 450,000 350,000 4 750,000 430,000 320,000
This class requires you to mathematically solve several financial management problems using simple algebra. The book has step-by-step explanations and examples. Two comments about math:
1) Starting with Assignment 1 you are going to need to manipulate numbers and in many cases submit an MS Excel spreadsheet. In most cases you will also need to submit a short paper about some decision you are recommending. Treat your papers as if you are writing to a “math phobic” boss, e.g., explain what the math means when reaching you recommendation.
- Starting with Week 2 the discussion questions have math problems embedded. I know it may be difficult to “discuss” arithmetic, but are a graduate student. So get creative and get some reasonable 200-word posts in the Dqs.
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