Write no more than a 450- to 1,350-word proposal which applies the methods for calculating a project’s viability.
Select one of the following organizations:
- British Petroleum (BP)
- Ford Motor Co.
- Applied Materials
Review the organization’s annual report by researching your chosen organization.
Write a proposal advising the selected organization on obtaining funding and managing a project budget, to purchase equipment to increase worker safety. The initial investment is $25M and the yearly cash inflows are as follows:
- Year 2 – $5M
- Year 3 – $10M
- Year 4 – $15M
- Year 5 – $12M
Assume all cash flows are at the beginning of the period and a discount rate of 10%.
Include the following information in your project proposal:
- Define business needs in an overivew of the project, including high-level deliverables to solve the problem.
- Describe the net present value (NPV), internal rate of return (IRR), profitability index, and payback methodologies for calculating the projects viability. Examine the strengths and weakness of each methodology.
- Calculate NPV, IRR, profitability index, and payback method. Explain the rationale for accepting or rejecting the project based on its financial viability.