Tips:

Use names for your alternatives for example - Ford F150 NOT Alternative 1 so that I do not have to scroll back to remember which item is alternative 1.

All costs and benefits including salvage must be included in ALL of your calculations.

Higher cost alternative must have higher benefit values, or your calculations may generate negative results

The purpose of this project to determine the best alternative, you should not determine that outcome until you have done all calculations.

Older editions of the text have depreciation methods we do not cover in class please do not use them in this report for example - Sum of Year Digits

You may use 5% for your MARR if you do not have one available from your data.

Use 21% federal tax rate for your tax calculations.

Avoid using methods not covered in class.

If you use a spreadsheet for calculations explain how you set it up and show cell calculations

FINAL PROJECT REQUIREMENTS:

Each report must contain the following:

- Title page to include:

Topic Title Course Number & Title

Semester & Year Your Name

- A cover letter / transmittal letter (signed)

- Table of Content

- Your Project Proposal - From prior assignment

DETAILED COMPANY BACKGROUND:

Expand on your description from the proposal. Give details of company origins, founders, major milestones, company growth. What are company revenues over the past 5 years?

PROBLEM TO BE SOLVED WITH YOUR ALTERNATIVE:

What is the issue to be solved - an aging / worn out pieces of equipment to be replaced, an "upgrade" to improve productivity, a new area of business.

What will the annual benefit ( in dollars) be as a result of purchasing this business asset (piece of equipment)

Other challenges or non economic issues that this may result in or solve

ALTERNATIVES (4 minimum excluding "do nothing"):

Give details of each of your alternatives including: All related cost and benefits Your initial costs for the equipment and any installation costs Annual Benefits (your EUAW should be positive after all annual costs) Salvage Value if applicable Use a 5-year minimum analysis period This should be more than just a summary table like an example in the text book If your benefits are too low, it doesnt make sense to purchase this alternative and your calculations will reflect this. Ask me if you are not sure. Determine which of your alternatives is the best using at least 2 methods weve covered; one method must be MARR (Chapter 7 & 8) and/or B/C ratio calculations (Chapter 9) You should get the same results with both methods used or there is a mistake in your calculations. Alternatives with higher costs should have higher values for the benefits You are providing the data. You are being graded on your ability to use the methods to determine the best alternative

BEST ALTERNATIVE:

After selecting your best alternative you will demonstrate your understanding of depreciation and tax impact on your benefits (revenue). Select 2 depreciation methods and calculate the depreciation each year for your analysis period. Explain which is the best method for your company. Determine your federal taxes for the first year Using Example 12-6 as a template calculate before and after tax ROR you can use straight line depreciation to simplify your calculations. What is your conclusion & recommendation based on the results of your calculations? This is not a summary of your calculations.