See attached file for data.
Guillermo Furniture, a company that manufactures midgrade and high-end sofas, has just hired you as an accountant. The owner, Guillermo Navallez, has assigned you the tasks of determining which decisions provide the greatest returns.
Recommend a course of action based on a capital budget evaluation technique and include present value calculations as part of your recommendation.© BrainMass Inc. brainmass.com October 10, 2019, 2:35 am ad1c9bdddf
See attached file.
I used net income as a proxy for future cash flows and estimated earning for five years. I used total assets as the ...
I used net income as a proxy for future cash flows and estimated earning for five years. I used total assets as the investment. These are not reasonable assumptions but it gives you a template to use so that when you have these amounts, you will be all set. Solution attached as Excel.
I also created my own numbers that were more reasonable so you can see how it works with credible amounts.