Choose an organization that is manufacturing based, example, Coke, Pepsi, Ford Motors etc. and locate the annual report for the most recent fiscal year. The company you have chosen is considering purchasing new equipment for the factory with an initial investment of $$2\mathrm{.}5$ million. Write a memo to your chosen company proposing or opposing the purchase on this new equipment.

Capital Budgeting Specifications

Your company expects to save $$500,000$ per year for the next $10$ years by purchasing the equipment.

The cost of capital is $15\%.$

The company believes its initial investment to be $$2\mathrm{.}5$ million.

Address the following areas in your memo for your chosen company below:

Identify and discuss each fixed and variable cost found on the company's annual report.

Calculate the Contribution Margin Income Statement

Determine and discuss the most effective costing method for your organization.

Using the capital budgeting numbers given, calculate payback period, Internal Rate of Return and Net Present Value $($NPV$)$ for the proposed investment.

Provide a recommendation for the organization on whether the investment in new equipment is a good investment and give at least three reasons to support your recommendation.

Show all calculations of Contribution Margin, Internal Rate of Return, Payback Period and Net