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Business Proposal

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Capital Budgeting Case
Mary Stahl
QRB/501
February 10, 2014
Gary White

Capital Budgeting Case Financial statements will help a company see where there money is going and coming from. This way they can plan for the future. Each statement shows where the money is and how well they are taking care of it. There are income statements, cash flows, net present value (NPV), and Internal Rate of Return (IRR) located in financial statements. To find the NPV and IRR you first need to create an income statement and cash flow statement. These will give you the correct amount. There are steps to take before determining your NPV and IRR.
In the capital budgeting case provided for this company to expand the best corporation to choose is corporation A. This corporation seems to be the best to go with by the numbers given. After creating an income statement, cash flow statement, NPV, and IRR for 5 years I have decided to go with A. This corporation will have more money left once all is paid and money is brought in.
Starting with the income statement between adding the revenue over 5 years and subtracting the expenses for 5 years the money in corporation a still seems the best. Along with subtracting the tax rate that is given there is still more money in corporation A for the company to work with. Even after 5 years with revenue and expenses this company will still have money left to have over the next couple of years. The cash flow which adds in the depreciation expenses still adds to up to corporation a being the best to go with. Once you have determined your net income and the amounts in the cash flow over the next 5 years you can start figuring out your NPV and IRR.
Knowing what your discount rate, initial investment, and cash flow over the next 5 years can help figure out the Net Present Value (NPV) of the corporation. The main reason for net present value is to

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