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Capital Budgeting Case

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Question;Your company is thinking;about acquiring another corporation. You have two choices?the cost of each choice is;$250,000. You cannot spend more than that, so acquiring both corporations is;not an option. The following are your critical data;Corporation A;Revenues = $100,000 in;year one, increasing by 10% each year;Expenses = $20,000 in;year one, increasing by 15% each year;Depreciation expense =;$5,000 each year;Tax rate = 25%;Discount rate = 10%;Corporation B;Revenues = $150,000 in;year one, increasing by 8% each year;Expenses = $60,000 in;year one, increasing by 10% each year;Depreciation expense =;$10,000 each year;Tax rate = 25%;Discount rate = 11%;Compute and analyze items;(a) through (d) using a Microsoft? Excel? spreadsheet.;Make sure all calculations can be seen in the background of the applicable;spreadsheet cells. In other words, leave an audit trail so others can see how;you arrived at your calculations and analysis. Items (a) through (d) should be;submitted in Microsoft? Excel?, indicate your;recommendation (e) in the Microsoft? Excel?;spreadsheet, the paper stated in item;(f) should be submitted consistent with APA guidelines.

 

Paper#60210 | Written in 18-Jul-2015

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