1. Team Alpha –Week 6
Capital Budgeting
Kirsten Coombs, Charles James, Alicia Stevenson, HarryTharp
QRB 501 – Johnnie Spraggins
October 21, 2013

2. Capital Budgeting Case – Scenario
• Our company, Alpha Analytics, is in the position to acquire a company.
• Our budget is $250,000

3. Company A – 5Year Projected Income
• Over 5 years CompanyA is projected to have between a 51% to 55% net
income increase.
• NPV = $223,499.39*
• IRR = 38.59%*
* Assuming growth is parallel to projection.

4. Company A – NPV & IRR

5. Company B – 5Year Projected Income
• Over 5 years Company B is projected to have between a 32% to 35% net
income increase.
• NPV = $408,605.99*
• IRR = 61.57%*
* Assuming growth is parallel to projection.

6. Company B – NPV & IRR

7. Analysis
Company
A
Company
B

8. Decision
Based on the fact that Company B has a higher
NPV and IRR, we recommend acquiring this
company.

9. Questions?