decide whether or not  the purchase of the new equipment is a worthwhile investment and to  communicate your recommendations to Executive Management for a final  decision

Wk4 Assignment Michael Smith

Your company has been presented with a decision on replacing a piece  of equipment for a new computerized version that promotes efficiency for  the upcoming year. As manager you will need to decide whether or not  the purchase of the new equipment is a worthwhile investment and to  communicate your recommendations to Executive Management for a final  decision. To be convincing, sufficient support for your recommendations  must be provided in order to be considered valid and accepted.

Existing Equipment   Original Cost 60,000   Present Book Value 30,000   Annual Cash Operating Costs 145,000   Current Market Value 15,000   Market Value in Ten Years 0   Remaining useful Life 10 years

Replacement Equipment   Cost 600,000   Annual Cash Operating Costs 50,000   Market Value in Ten Years 0   Useful Life 10 years

Other Information    Cost of Capital 10%   Payback requirement 6 years

In this assignment, use the information above to develop a  comprehensive analysis using NPV, Payback Method, and IRR to develop a  recommendation on replacing the existing equipment with a new  computerized version. Develop an executive summary of your findings in a  Microsoft PowerPoint presentation format to present to Executive  Management.

Do the following in your presentation:

• Include a statement of the problem or topic, a concise analysis of  the findings, and a recapitulation of any main conclusions or  recommendations.
• Be sure to incorporate specific details to highlight or support the summary including calculations.
• Using your knowledge of capital budgeting techniques, explain how  principles of capital budgeting, such as the payback method, IRR, and  NPV, can be used to assess the potential projects and assist in the  decision-making process.

Develop a 10-12 slide presentation in PowerPoint format. Apply APA  standards to citation of sources. Use the following file naming  convention: LastnameFirstInitial_M4_A2.ppt.