Capital Budgeting Project Feasibility Evaluation

Running head: FINANCE
Finance
Name of the Student:
Name of the University:
Author’s Note:

FINANCE1
Table of Contents
Task A..............................................................................................................................................2
Task B..............................................................................................................................................3
Bibliography....................................................................................................................................5

FINANCE2
Task A
Capital Budgeting is the key investment process and proposal which is well applied for
the purpose of evaluating the feasibility of the project. Feasibility of the project is well assessed
with the help of certain key investment techniques like Net Present Value, Internal Rate of
Return and Payback Period for the project. The key capital budgeting that the organisation is
well evaluating is the installation of payphones which would be installed in the Sydney Area.
The cash inflows for the project would be coming from the Digital Advertisement that the
company would be doing along with the call revenue that would be flowing to the company.
Capital Expenditure for the project would be earned will be well assessed with the help of the
total initial investment that would be done in the project. Capital Expenditure Budget was
prepared for the project whereby relevant cash flows that would be flowing to the company has
been considered into analysis for the five-year trend period. In order to well carryout the
investment proposal evaluation there was a set of key capital budgeting tools that have been well
deployed for the purpose of analysis and these were well applied by analysing the various
revenue assumptions and as well as the various capital expenditure that would be observed in the
five year period. As such it is important only financial perspective or measures have been
especially taken into consideration for the purpose of analysis of the company. However cross
verification of the data points and assumptions included should be well done by well analysing
the various methods or techniques that would be helping in well analysing the feasibility of the
project. It is important to note that in order to well evaluate the project the key set of capital
budgeting tools that has been used in the NPV, IRR and the Payback Period.