Introduction to Finance

Year 201X
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Total Assets
$500,000 $475,000 $460,000 $470,000 $475,000 $485,000 $495,000 $555,000 $600,000 $650,000 $700,000 $750,000
Current Assets
$250,000 $220,000 $199,900 $204,698 $204,392 $208,980 $213,459 $262,829 $307,085 $351,227 $395,251 $439,156
Year 201X + 1
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec
Total Assets
$600,000 $570,000 $552,000 $564,000 $570,000 $582,000 $594,000 $660,000 $720,000 $780,000 $840,000
$900,000
Current Assets
$350,000 $350,000 $352,100 $359,302 $365,608 $373,020 $380,541 $397,171 $412,915 $428,773 $444,749
$460,844

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CHAPTER 
17
Capital Budgeting Analysis
L E A R N I N G O B J E C T I V E S
After studying this chapter, you should be able to do the following:
LO. 17.1
Explain how the capital budgeting process should be related to a fi rm’s mission 
and strategies.
LO 17.2
Identify and describe the fi ve steps in the capital budgeting process.
LO 17.3
Calculate net present value, describe what it measures, and explain how it is used 
in capital budgeting analysis.
LO 17.4
Calculate internal rate of return, describe what it measures, and explain how it is 
used in capital budgeting analysis.
LO 17.5
Calculate modifi ed internal rate of return, describe what it measures, and explain 
how it is used in capital budgeting analysis.