For this assignment, refer to the scenario located in “Problems – Series A” section 10-19A of Ch. 10, “Planning for Capital Investments” of Fundamental Managerial Accounting Concepts. This scenario puts you at task as a Senior Accountant for Donovan Enterprises to identify the preferred method and best investment opportunity for the company.
Screeshot of Section 10-19A is attached below
Read the scenario in the textbook and complete the activity below.
Use Excel®—showing all work and formulas—to compute the following:
- Compute the net present value of each project.Round your computations to 2 decimal points.
- Compute the approximate internal rate of return for each project. Round your rates to 6 decimal points
Create a PowerPoint® presentation showing the comparison of the net present value approach with the internal rate of return approach calculated above. Complete the following in your presentation:
- Analyze the results of the net present value calculations and the significance of these results, supported with examples.
- Determine which project should be adopted based on the net present value approach and provide rationale for your decision.
- Analyze the results of the internal rate of return calculation and the significance of these results, supported with examples.
- Determine which project should be adopted based on the internal rate of return approach and provide rationale for your decision.
- Determine the preferred method in the given circumstances and provide reasoning and details to support the method selected.
- Synthesize results of analyses and computations to determine the best investment opportunity to recommend to the president of Donovan Enterprises.