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Please Help. By the end of Week 3 - select a company, download the most recent copy of the company's 10-K report, and submit your
Please Help. By the end of Week 3 - select a company, download the most recent copy of the company's 10-K report, and submit your company choice to your professor for approval.
I chose Disney
The parameters for the week 7 project deliverable are as follows.
- The firm is looking to expand its operations by 10% of the firm's net property, plant, and equipment. (Calculate this amount by taking 10% of the property, plant, and equipment figure that appears on the firm's balance sheet.)
- The estimated life of this new property, plant, and equipment will be 12 years. The salvage value of the equipment will be 5% of the property, plant and equipment's cost.
- The annual EBIT for this new project will be 18% of the project's cost.
- The company will use the straight-line method to depreciate this equipment. Also assume that there will be no increases in net working capital each year. Use 35% as the tax rate in this project.
- The hurdle rate for this project will be the WACC that you are able to find on a financial website, such as Gurufocus.com. If you are unable to find the WACC for a company, contact your instructor. He or she will assign you a WACC rate.
- Your calculations for the amount of property, plant, and equipment and the annual depreciation for the project
- Your calculations that convert the project's EBIT to free cash flow for the 12 years of the project.
- The following capital budgeting results for the project
- Net present value
- Internal rate of return
- Discounted payback period.
- Your discussion of the results that you calculated above, including a recommendation for acceptance or rejection of the project
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