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Audit for the company ‘Signet Jewelers’
April 10, 2020Finance Accounting
April 10, 2020Instructions:
- Read the case below and answer all four questions at the end of the case.
- Show all work when comparing alternatives and using calculated values.
- Submit your answers on a Word (.doc), Excel (.xls), or PDF (.pdf) document
Acme Engineering is evaluating 10 projects for next year’s capital budget investments. Their corporate MARR is set at 12% and all projects have a 10-year life:
| Project | Initial Cost (thousands) | Annual Benefit (thousands) |
| 1 | $50 | $10.3 |
| 2 | $150 | $32.2 |
| 3 | $100 | $17.7 |
| 4 | $300 | $48.8 |
| 5 | $50 | $11.9 |
| 6 | $200 | $38.3 |
| 7 | $50 | $10.0 |
| 8 | $200 | $36.9 |
| 9 | $50 | $11.5 |
| 10 | $100 | $22.3 |
- Calculate the IRR for every project
- If money is not a problem which projects should be approved?
- Rank order all the acceptable projects according to IRR
- If only $450,00 is available for the budget which projects should be approved?
Rubric
Capital Budgeting Case
| Capital Budgeting Case | ||
| Criteria | Ratings | Pts |
| This criterion is linked to a Learning OutcomeCalculate IRR for all proyects | 35.0 pts Full Marks 0.0 pts No Marks | 35.0 pts |
| This criterion is linked to a Learning OutcomeProjects to be Approved | 35.0 pts Full Marks 0.0 pts No Marks | 35.0 pts |
| This criterion is linked to a Learning OutcomeRank Order According to IRR | 35.0 pts Full Marks 0.0 pts No Marks | 35.0 pts |
| This criterion is linked to a Learning OutcomeProyects to be approved with $450,000 budget | 35.0 pts Full Marks 0.0 pts No Marks | 35.0 pts |
| This criterion is linked to a Learning OutcomeProfessional Presentation | 15.0 pts Full Marks 0.0 pts No Marks | 15.0 pts |
| Total Points: 155.0 |
