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Long Term Financing Analysis: Capital Investment & Analyses

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Explain the concepts of net present value and internal rate of return analysis. What do the results of net present value and internal rate of return analysis tell senior managers of an organization? Would sensitivity analysis be a useful tool for assessing this capital project's risk and return?

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Net present value and internal rate of return are the important tools to make capital budgeting decisions. Capital budgeting involves making decisions about the long term mix of the composition of assets of the business. As per Zen Wealth, "Capital budgeting is the process by which the firm decides which long-term investments to make." Capital budgeting projects, i.e., potential long-term investments, are expected to generate cash flows over several years. The decision to accept or reject a capital budgeting project depends on an analysis of the cash flows generated by the project and its ...

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Financial Analysis: FedEx Corporation

See the attachments.

For the course project, you are to choose FedEx corporation (http://www.fedex.com/us/investorrelations/financialinfo/goals ; http://ir.fedex.com/annuals.cfm ; http://files.shareholder.com/downloads/FDX/992754901x0x395636/5b8f7453-b960-4f0f-92cd-ec27cab06760/FedEx_2010_AR.pdf) that is listed and traded on the New York Stock Exchange (NYSE: Symbol - FDX) [Current share price, company background and other information: http://money.cnn.com/quote/quote.html?symb=FDX].

The project has two sections: in the first section, you are required to estimate the cost of capital of the FedEx Corporation as of the beginning of the present session. In the second part, you apply the cost of capital to assess the extent to which a particular (hypothetical) investment project should be approved by the FedEx Corporation, and the NPV of this proposed investment.

Are there any important economic variables that financial managers of FedEx Corporation need to identify before expanding in Canada?

What are the main challenges that the financial managers of FedEx Corporation will face to open up new branch in Canada?

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