Course Project—M3 Working Ahead
Last module, you received your instructor’s approval of your company and actual planned investment. In this module, you need to begin working on the Cost, Volume, Profit Analysis spreadsheet provided for the project to outline the revenues, costs, expenses, and resulting cash flows. If you selected a manufacturing company and the project deals with a product or change in project, you will need to consider direct and indirect costs. Detail out your costs and cash flows. Make sure these are reasonable for the project you have selected.
Before the end of Module 3, you should have all of your revenues, expenses, investments, profit, and resulting cash flows on an Excel worksheet complete with all calculations performed using Excel functions.
In the last module, you completed your estimate of cash flows for your project. In this module, you will calculate the break-even point for the project and the expected financial returns.
- Open the Cost-Volume-Profit spreadsheet that you have been working in and calculate the break-even point.of your proposed project. (Access the CVP template if you have not yet begun this work)
- The project must use a 6.5% cost of capital and a tax rate of 25%.
- Complete IRR (Internal Rate of Return) and NPV (Net Present Value) for the project.
- Make sure you show your Excel formulas or provide calculations so your instructor can review your work.
- You should have also considered key points of any intangible benefits or costs associated with the project and begun supplementing your pro forma statement with sufficient background information to enable a prospective investor to decide if your company is worth investing in.