STEP 4 ONLY
Utilize the attached “Excel” template. Outside resources are not allowed, and Citations are not required (use suggested resources in reading). Projects 1-4 worksheets will be uploaded for calculation/comparison purposes if needed.
Scenario
Your team’s work with Largo Global Inc. (LGI) is nearly complete. In your consulting role, you have recommended steps for improving the company’s financial health. You have offered advice on a revenue target, recommended steps for optimizing operations, and suggested investments that will improve LGI’s competitive position. In your final project, you will continue working on capital budgeting with a focus on the best way for LGI to finance the investments you recommend.
Your Project 5 business report will focus on ensuring LGI’s capital structure is sound and that the company is on a financially sustainable path. You will recommend a plan for financing investments that does not expose LGI to unnecessary risk. By the end of this project, the company’s financial statements should demonstrate that it has returned to a competitive position.
Step 4: Complete the Analysis Calculation for Project 5
Your team has provided you with an Excel workbook containing LGI’s financials. You will use the Project 5 Excel workbook to perform advanced capital budgeting techniques to assess the viability of the investment you made in the previous project.
Complete the analysis calculation for the project:
Download the Project 5 Excel Workbook, click the Instructions tab, and read the instructions.
Calculate cost of debt and equity as well as weighted average cost of capital (WACC).
Apply the capital asset pricing model (CAPM).
Develop a capital budget.