FM Project: Sponsor Recommendations and Value Addition Analysis

This project delves into the crucial role of financial decisions in maximizing firm value, particularly focusing on capital budgeting and its impact on investment projects. The analysis centers around evaluating two distinct projects, 'Project S' and 'Project L,' using several capital budgeting techniques such as Net Present Value (NPV), Payback Period, Accounting Rate of Return (ARR), Profitability Index (PI), and Internal Rate of Return (IRR). The project explores the value added to a firm if sponsors act upon provided recommendations, including the development of long-term strategic goals, seeking new investment projects, estimating future cash flows, facilitating information transfer, and monitoring expenditures. The project underscores the importance of capital budgeting in systematic assessment of investment projects and its role in creating value for the firm by providing a framework for making informed investment decisions and ensuring financial stability. The analysis highlights the importance of capital budgeting in making strategic decisions within the scope of the business.