dq 1 Imagine you are a representative of management in the company you have selected for your Week Six assignment and you must make a capital budgeting decision. The decision is to implement a new computer network system to decrease the time between customer order and delivery.

 

 

The cost will be 10% of last year’s profits. You are charged with describing the important considerations in the decision-making process to upper management. In your response, be sure to include the following:

A description of the important factors, in addition to quantitative factors, that were considered when making this capital budgeting decision. An explanation of how these factors are significant to the company. A summary of how you will determine the criteria to rank capital budgeting decisions and whether some criteria are more important than others. A calculation of the proposed return on investment based on criteria you select and justification for that ROI. Develop a 200 – 250 word explanation supporting your recommendations.

 

 

Tip: For help with reading an annual report access this handy guide from Moneychimp (http://www.moneychimp.com/articles/financials/fundamentals.htm)

Guided Response: Review several of your classmates’ postings. Respond to at least two of your classmates by adding additional factors to consider in the decision-making process that they may have missed or would add positively to the results of the budgeting decision. Be sure to include evidence to support your position.

dq2 Revisit the company you chose for your Week Six Final Project. Using the annual report and other sources such as a 10k or 10q’s, discuss the dividend policy of your company.

 

 

Answer the following questions as part of your response:

How would you describe your chosen company’s dividend policy? Why do you believe this company chose the dividend policy they have in place? Do you agree or disagree that they have selected the best dividend policy for the company? How might this dividend policy function in both perfect and imperfect capital markets? Calculate the dividend rate over the past 5 years. Define why you believe that it has or has not changed over the last 5 years. Support your position with evidence from the text or external sources. Your post should be 200-250 words in length.

Guided Response: Review several of your classmate’s postings. Respond to at least two classmates by commenting on whether you agree or disagree with your classmates’ reasoning for the selection of dividend policy. Provide other reasons why that particular company may have chosen that dividend policy.

 

 

journal We examined two very important topics in finance this week; Capital Budgeting and Dividend Policy.

Critically reflect on the importance of selecting the right projects in which to invest capital. Do we always select those projects that have the highest return on investment? What other factors play into capital budgeting decisions?

We also looked at dividend policy. What incentive is there for a company to pay dividends? What signals does dividend policy provide to investors?

Carefully review the Grading Rubric for the criteria that will be used to evaluate your journal entries.

Assignments Select a company and access the last three years’ annual reports. Next, select a company that is a direct competitor and download the previous three years’ annual reports.

Research Tip: The “Mergent” database in the Ashford Library contains company profiles and financial information for publicly traded companies and their competitors. To access this database enter the Ashford Library and select “Find Articles and More” in the top menu panel. Next, select “Databases A-Z” and go to section “M” for “Mergent”. For help with using Mergent use Mergent Online Quick Tips.

 

 

Tip: For help with reading an annual report access this handy guide from Moneychimp (http://www.moneychimp.com/articles/financials/fundamentals.htm)

Using the annual reports of both companies, complete the following in a three- to five-page paper, excluding title and reference page(s):

For each company, report the amount of capital spending for the past three years. Quantitatively determine whether the amount of capital spending has been consistent or if it has fluctuated. Be sure to provide the calculations used to determine your answer. Describe the capital expenditures of each firm and the factors that impacted the companies’ debt capacities and capital structures.

 

 

Next, compare the level of capital spending across the two firms. Point out how the spending was similar and/or different and speculate why the similarities or differences might exist. You must use at least three scholarly sources in addition to the text. Support your comparison with evidence from the text, external sources, and articles/reports from the Mergent database in the Ashford University Library.

Format the paper according to the APA 6th edition style guide as outlined in the Ashford Writing Center. Be sure to properly cite your resources using APA style.

 

 

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