In capital budgeting decisions, employing real-world figures is paramount to ensuring the reliability and relevance of the analyses undertaken. By justifying assumptions with accurate and current data, companies can enhance the robustness of their capital budgeting analyses, thereby making informed and prudent investment choices that align with their strategic objectives and long-term growth prospects.

The goal of the Extended Real-world Analysis is to take you beyond textbook knowledge. It is about learning to use real-world data effectively. In the business world, you will often encounter lots of information, and not all of it will be useful or accurate. Through this exercise, you can learn to develop the skill to identify and use trustworthy data, making your financial decisions for businesses stronger and more informed. This is an essential step in preparing you for real-world challenges in your future careers.

Do you think any given assumptions are not very reasonable? If so, please identify as many unreasonable assumptions as possible and propose your own assumptions, supported by credible justifications. How will they change the results? (For example, Fords EV selling price and the annual capital expenditure should not remain constant over many years; they should at least be adjusted for inflation. We can use the average U.S. target inflation rate of 2% as the annual growth rate for these figures to make them more realistic.)