Evaluation of Alternate Capital Budget Proposals for OPAIC

OPAIC
CAPITAL BUDGETING.
Student :
Evaluation of Alternate Capital Budget Proposals.
To be reviewed by :
Date of submission :

INTRODUCTION.
OPAIC is an educational institution. For the financial year 2019 it has a capital budget
of 50,000 NZD. There are four alternative projects which have to be evaluated using
capital budgeting techniques. The project which is the most beneficial to the
institution will be selected for making the investment.
PROJECT I
The work involved in this project is addition of a garden and BBQ area on the roof of
the OPAIC building for staff and summer functions including serving of beverages..
The space provided will be sufficient to accommodate 80 persons at a time.
Construction will be completed within 6 months.
PROJECT II.
Providing a new website for industry internship students of OPAIC. The website will provide
guidance to students on course materials, CV writing, interview techniques, how to complete
internship projects, potential intern search for both candidates and organisations, advertising
from potential internship companies and a messaging system with appropriate security for
each level of user.
PROJECT III
Renovating 8th floor of OPAIC into a full library space that incorporates modern ways
to study including collaborative work spaces, informal seating, technology, and self
checkout capabilities of course text.
PROJECT IV.
Extension of building in Aotea centre for holding workshops and information sessions
bringing together potential industry interns with prospective companies, including
internship options, graduates speaking about their internships, industry speakers,
followed by networking sessions.
ANALYSIS.
The capital budgeting techniques used for choosing the best projects amongst alternate
proposals are ;
(a) Payback method (without discounting)
(b) NPV
(c) IRR
(d) Profitability index.
(e) Accounting Rate of Return.