Abubakaryousaf Business - 49336

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  • From: Business,
  • Due on: Sat 22 Mar, 2014 (04:42pm)
  • Asked on: Sat 22 Mar, 2014
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Course Project: Evaluating Investment Options

Objective | GuidelinesMilestones | Grading Rubrics| Best Practices

Objective \"\\"Back\"

The objective of the project is applying financial analysis concepts in real-life investment scenarios. The project will be divided in two sections with Part I due at the end of Week 3 and Part II at the end of Week 6. Part I of the project will give students the opportunity to use valuation and time value of money techniques to evaluate stocks and bonds under different market conditions. Part II of the project will require students to incorporate the concepts of cost of capital, capital budgeting and capital structure in evaluating a specific capital investment project using the Net Present Value approach. Both Part I and II will include calculations, as well as a written analysis about the results and implications of these calculations.

  • For detailed instructions and requirements about Part I of this course project, click here.     
  • For detailed instructions and requirements about Part II of this course project, click here.
Guidelines \"\\"Back\"
  • The project is subdivided in Tasks. Part I contains Tasks 1, 2 and 3 and is due at the end of Week 3. Part II contains Task 4 and 5 and is due at the end of Week 6.     
  • Present all your calculations and formulas used along with your final results. You will be graded on the quality of your calculations, as well as on the written analysis provided.     
  • For any recommendations or conclusions provided, support your conclusions with detailed information.     
  • Use the grading rubric provided below as a guideline for project development.     
  • All DeVry University policies are in effect including the plagiarism policy.     
  • You may post any questions on this assignment under the weekly Q&A section.
Milestones \"\\"Back\"


  1. Deliverable #1 – Due at the end of Week 3. For Deliverable #1, please respond to Tasks 1, 2 and 3.     
  2. Deliverable #2 – Due at the end of Week 6. For Deliverable #2, complete Tasks 4 and 5. Make sure to provide a yes/no recommendation on the purchase of the new machine. Justify your recommendation.


Grading Rubrics \"\\"Back\"


Task 1 – Assess Loan Options 50 36 Calculate the EAR for two banks (20 pts), make a recommendation to the best option (20 pts) and compute payments for the selected loan (10 pts).
Task 2 – Evaluate Competitor’s Stock 40 28 Calculate the value of the stock using the dividend growth model (25 pts). Address the impact of changes in certain variable conditions on market prices (15 pts).
Task 3 - Bond Valuation 50 36 Determine the coupon rate of bonds and compare it to the market price (20 pts). Explain factors affecting bond risk (20 pts). Describe some covenants associated with bonds (10 pts).
Total 140 100  





Task 4 – Capital Budgeting 75 50 Compute the NPV and IRR of a project and make recommendations based on calculations (30 pts). Analyze factors affecting the capital budgeting process (25 pts). Describe project risks and analysis (20 pts).
Task 5 – Cost of Capital 75 50 Calculate the WACC and describe methods for computing the cost of capital (60 pts). Explain the appropriate use of the WACC (10 pts). Compute the NPV of a project based on the WACC (5 pts).
Total 150 100  




Best Practices



Start your project as quickly as possible. You should become acquainted with the project instructions during Week 1 of the course and progressively move forward. A recommended timeline for project development is as follows:

Week 1:

  • Get acquainted with project instructions and rubrics
  • Search for prime rate
    Post any questions under Q&A

Week 2:

  • Complete Task 1
  • Work on Yahoo Finance to obtain the last dividend and price of competitor companies
    Post any questions under Q&A

Week 3:

  •  Complete Tasks 2 and 3

Week 4:

  • Work on Task 4
    Post any questions under Q&A

Week 5:

  • Complete Task 4
  • Search for competitors’ betas
    Post any questions under Q&A

Week 6:

    Work and complete Task 5

Your Course Project should be well-organized. Please attach any necessary Excel Workbooks as necessary along with your written analysis.

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