Great job on your last assessment in our course so far! You did a great job explaining all methods correctly. Please revise all calculations, then re-assess whether the two projects should be accepted or not based on the revised results. Please apply my feedback below, refer to Weaver & Weston (2001) Chapter 9, highlight your changes, then resubmit your assessment for review. If you think it might be helpful, complete the calculations in Excel using the prebuilt formulas and submit the Excel spreadsheet with your next attempt. Keep up the great work! Dana  COMPETENCY: Define finance terminology and its application within the business environment. CRITERION: Calculate the internal rate or return (IRR) and modified rate or return (MIRR) for a project. DISTINGUISHED PROFICIENT BASIC NON-PERFORMANCE Basic Calculates the IRR and MIRR for a project using inaccurate or incomplete information.  Faculty Comments:“ Both the IRR and MIRR calculations are incorrect. Please double-check the formulas against those in our textbooks, then revise the calculations!  ” CRITERION: Identify the benchmark when using net present value (NVP). DISTINGUISHED PROFICIENT BASIC NON-PERFORMANCE Proficient Identifies the benchmark when using NPV.  Faculty Comments:“ Good job stating the benchmark for using NPV! For a distinguished level of performance, provide real-world and specific examples of using the benchmark for NPV.  ” CRITERION: Explain the payback period statistic. DISTINGUISHED PROFICIENT BASIC NON-PERFORMANCE Distinguished Analyzes the payback period statistic and connects the analysis to relevant real-world examples.  Faculty Comments:“ Great job explaining the payback period statistic and the detailed example you provided to show its applicability!  ” CRITERION: Identify the payback period statistic acceptance benchmark. DISTINGUISHED PROFICIENT BASIC NON-PERFORMANCE Distinguished Analyzes the payback period acceptance benchmark and connects the analysis to relevant real-world examples.  Faculty Comments:“ Very good job on your explanation of the payback period acceptance benchmark and the example you provided!  ” CRITERION: Calculate the net present value (NVP) for a project. DISTINGUISHED PROFICIENT BASIC NON-PERFORMANCE Basic Calculates the NPV for a project using inaccurate or incomplete information.  Faculty Comments:“ The calculations of the NPV are incorrect. Please refer back to Weston and Weaver (2001), revise the formula, then the calculations.  ” COMPETENCY: Evaluate the financial health of an organization. CRITERION: Explain the net present value (NVP) method for determining a capital budgeting project's desirability. DISTINGUISHED PROFICIENT BASIC NON-PERFORMANCE Proficient Explains the NPV method for determining the desirability of a capital budgeting project. Faculty Comments:“ Good job explaining the concept of NPV! Please provide specific examples of its applicability for a distinguished level of performance.  ” CRITERION: Explain whether a p ...

1. Great job on your last assessment in our course so far! You did
a great job explaining all methods correctly. Please revise all
calculations, then re-assess whether the two projects should be
accepted or not based on the revised results.
Please apply my feedback below, refer to Weaver & Weston
(2001) Chapter 9, highlight your changes, then resubmit your
assessment for review. If you think it might be helpful,
complete the calculations in Excel using the prebuilt formulas
and submit the Excel spreadsheet with your next attempt.
Keep up the great work!
Dana
COMPETENCY: Define finance terminology and its application
within the business environment.
CRITERION: Calculate the internal rate or return (IRR) and
modified rate or return (MIRR) for a project.
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Basic
Calculates the IRR and MIRR for a project using inaccurate or
incomplete information.
Faculty Comments:“
Both the IRR and MIRR calculations are incorrect. Please
double-check the formulas against those in our textbooks, then
revise the calculations!
”
CRITERION: Identify the benchmark when using net present
value (NVP).
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Proficient

2. Identifies the benchmark when using NPV.
Faculty Comments:“
Good job stating the benchmark for using NPV! For a
distinguished level of performance, provide real-world and
specific examples of using the benchmark for NPV.
”
CRITERION: Explain the payback period statistic.
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Distinguished
Analyzes the payback period statistic and connects the analysis
to relevant real-world examples.
Faculty Comments:“
Great job explaining the payback period statistic and the
detailed example you provided to show its applicability!
”
CRITERION: Identify the payback period statistic acceptance
benchmark.
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Distinguished
Analyzes the payback period acceptance benchmark and
connects the analysis to relevant real-world examples.
Faculty Comments:“
Very good job on your explanation of the payback period
acceptance benchmark and the example you provided!
”
CRITERION: Calculate the net present value (NVP) for a
project.
DISTINGUISHED
PROFICIENT
BASIC

3. NON-PERFORMANCE
Basic
Calculates the NPV for a project using inaccurate or incomplete
information.
Faculty Comments:“
The calculations of the NPV are incorrect. Please refer back to
Weston and Weaver (2001), revise the formula, then the
calculations.
”
COMPETENCY: Evaluate the financial health of an
organization.
CRITERION: Explain the net present value (NVP) method for
determining a capital budgeting project's desirability.
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Proficient
Explains the NPV method for determining the desirability of a
capital budgeting project.
Faculty Comments:“
Good job explaining the concept of NPV! Please provide
specific examples of its applicability for a distinguished level
of performance.
”
CRITERION: Explain whether a project should be accepted or
rejected, based on the calculated IRR and MIRR.
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Basic
Explains whether a project should be accepted or rejected,
based on the calculated IRR and MIRR, but omits key elements.
Faculty Comments:“
Once the calculations above are revised, please reevaluate the

4. decision to accept or reject the project, and explain the
reasoning.
”
CRITERION: Describe the internal rate of return (IRR) method
for determining the desirability of a capital budgeting project.
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Proficient
Describes the IRR method for determining the desirability of a
capital budgeting project.
Faculty Comments:“
Good job describing the IRR method! Please provide real-world
examples of its applicability as well for a distinguished level of
performance.
”
CRITERION: Identify the internal rate of return (IRR)
acceptance benchmark of a capital budgeting project.
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Proficient
Identifies the IRR acceptance benchmark of a capital budgeting
project.
Faculty Comments:“
Great job identifying and explaining the IRR acceptance
benchmark! Please provide practical examples as well.
”
CRITERION: Describe the modified internal rate of return
(MIRR) method for determining the desirability of a capital
budgeting project.
DISTINGUISHED
PROFICIENT
BASIC

5. NON-PERFORMANCE
Proficient
Describes the MIRR method for determining the desirability of
a capital budgeting project.
Faculty Comments:“
Good job describing the MIRR method! Please provide an
example to show your understanding of the MIRR method.
”
CRITERION: Identify the strengths and weaknesses of modified
internal rate of return (MIRR).
DISTINGUISHED
PROFICIENT
BASIC
NON-PERFORMANCE
Proficient
Identifies the strengths and weaknesses of MIRR.
Faculty Comments:“
Good job explaining the pros and cons of MIRR! Please provide
examples as well.
”
Overview
Respond to four questions and solve two computational
problems about the capital budgeting process.
The capital budgeting process is a method used by organizations
to evaluate their investment in various projects, such as buying
new machinery or expanding into a new plant. You will benefit
from being able to demonstrate the use of the capital budgeting
process, including the following techniques and terms:
· Net present value (NPV) method.
· Internal rate of return (IRR) method.
· Modified internal rate of return (MIRR) method.
· Payback period.
· Discounted payback period.
· Profitability index.

6. By successfully completing this assessment, you will
demonstrate your proficiency in the following course
competencies and assessment criteria:
· Competency 2: Define finance terminology and its application
within the business environment.
. Identify the benchmark when using net present value (NVP).
. Explain the payback period statistic.
. Identify the payback period statistic acceptance benchmark.
. Calculate the internal rate or return (IRR) and modified rate or
return (MIRR) for a project.
. Calculate the net present value (NVP) for a project.
· Competency 3: Evaluate the financial health of an
organization.
. Explain the net present value (NVP) method for determining a
capital budgeting project's desirability.
. Describe the internal rate of return (IRR) method for
determining the desirability of a capital budgeting project.
. Identify the internal rate of return (IRR) acceptance
benchmark of a capital budgeting project.
. Describe the modified internal rate of return (MIRR) method
for determining the desirability of a capital budgeting project.
. Identify the strengths and weaknesses of modified internal rate
of return (MIRR).
. Explain whether a project should be accepted or rejected,
based on the calculated IRR and MIRR.
Suggested Resources
The following optional resources are provided to support you in
completing the assessment or to provide a helpful context. For
additional resources, refer to the Research Resources and
Supplemental Resources in the left navigation menu of your
courseroom.
Library Resources
The following e-books or articles from the Capella University
Library are linked directly in this course:
· Weaver, S. C., & Weston, J. F. (2001). Finance and accounting

7. for nonfinancial managers. New York, NY: McGraw-Hill.
· Sherman, E. H. (2011). Finance and accounting for
nonfinancial managers (3rd ed.). New York, NY: American
Management Association.
SHOW LESS
Course Library Guide
A Capella University library guide has been created specifically
for your use in this course. You are encouraged to refer to the
resources in the BUS-FP3062 – Fundamentals of Finance
Library Guide to help direct your research.
Bookstore Resources
The resources listed below are relevant to the topics and
assessments in this course and are not required. Unless noted
otherwise, these materials are available for purchase from
the Capella University Bookstore. When searching the
bookstore, be sure to look for the Course ID with the specific –
FP (FlexPath) course designation.
· Cornett, M., Adair, T., & Nofsinger, J. (2016). M:
Finance (3rd ed.). New York, NY: McGraw-Hill.
Instructions
Respond to the questions and complete the problems.
Questions
In a Word document, respond to the following. Number your
responses 1–4.
1. Explain the net present value (NPV) method for determining
a capital budgeting project's desirability. What is the acceptance
benchmark when using NPV?
2. Explain the payback period statistic. What is the acceptance
benchmark when using the payback period statistic?
3. Describe the internal rate of return (IRR) as a method for
deciding the desirability of a capital budgeting project. What is
the acceptance benchmark when using IRR?
4. Describe the modified internal rate of return (MIRR) as a
method for deciding the desirability of a capital budgeting
project. What are MIRR's strengths and weaknesses?
Use references to support your responses as needed. Be sure to

8. cite all references using correct APA style. Your responses
should be free of grammar and spelling errors, demonstrating
strong written communication skills.
Problems
In either a Word document or Excel spreadsheet, complete the
following problems.
· You may solve the problems algebraically, or you may use a
financial calculator or an Excel spreadsheet.
· If you choose to solve the problems algebraically, be sure to
show your computations.
· If you use a financial calculator, show your input values.
· If you use an Excel spreadsheet, show your input values and
formulas.
In addition to your solution to each computational problem, you
must show the supporting work leading to your solution to
receive credit for your answer.
1. Based on the cash flows shown in the chart below, compute
the NPV for Project Huron. Suppose that the appropriate cost of
capital is 12 percent. Advise the organization about whether it
should accept or reject the project.
Project Huron
Time
0
1
2
3
4
Cash Flow
$12,000
$2,360
$4,390
$1,520
$3,300
2. Based on the cash flows shown in the chart below, compute
the IRR and MIRR for Project Erie. Suppose that the
appropriate cost of capital is 12 percent. Advise the

9. organization about whether it should accept or reject the
project.
Project Erie
Time
0
1
2
3
4
5
Cash Flow
$12,000
$2,360
$4,390
$1,520
$980
$1,250
Capital Budgeting Techniques Scoring Guide
CRITERIA
NON-PERFORMANCE
BASIC
PROFICIENT
DISTINGUISHED
Explain the net present value (NVP) method for determining a
capital budgeting project's desirability.
Does not explain the NPV method for determining the
desirability of a capital budgeting project.
Explains the NPV method for determining the desirability of a
capital budgeting project but omits key elements.
Explains the NPV method for determining the desirability of a
capital budgeting project.
Analyzes the NPV method for determining the desirability of a
capital budgeting project and connects the analysis to relevant

10. real-world examples.
Identify the benchmark when using net present value (NVP).
Does not identify the benchmark when using NPV.
Identifies the benchmark when using NPV but omits key
elements.
Identifies the benchmark when using NPV.
Analyzes the benchmark when using NPV and connects the
analysis to relevant real-world examples.
Explain the payback period statistic.
Does not explain the payback period statistic.
Explains the payback period statistic but omits key elements.
Explains the payback period statistic.
Analyzes the payback period statistic and connects the analysis
to relevant real-world examples.
Identify the payback period statistic acceptance benchmark.
Does not identify the payback period acceptance benchmark.
Identifies the payback period acceptance benchmark but omits
key elements.
Identifies the payback period acceptance benchmark.
Analyzes the payback period acceptance benchmark and
connects the analysis to relevant real-world examples.
Describe the internal rate of return (IRR) method for
determining the desirability of a capital budgeting project.
Does not describe the IRR method for determining the
desirability of a capital budgeting project.
Describes the IRR method for determining the desirability of a
capital budgeting project but omits key elements.
Describes the IRR method for determining the desirability of a
capital budgeting project.
Analyzes the IRR method for determining the desirability of a
capital budgeting project and connects the analysis to relevant
real-world examples.
Identify the internal rate of return (IRR) acceptance benchmark
of a capital budgeting project.
Does not identify the IRR acceptance benchmark of a capital
budgeting project.

11. Identifies the IRR acceptance benchmark of a capital budgeting
project but omits key elements.
Identifies the IRR acceptance benchmark of a capital budgeting
project.
Analyzes the IRR acceptance benchmark of a capital budgeting
project and connects the analysis to relevant real-world
examples.
Describe the modified internal rate of return (MIRR) method for
determining the desirability of a capital budgeting project.
Does not describe the MIRR method for determining the
desirability of a capital budgeting project.
Describes the MIRR method for determining the desirability of
a capital budgeting project but omits key elements.
Describes the MIRR method for determining the desirability of
a capital budgeting project.
Analyzes the MIRR method for determining the desirability of a
capital budgeting project and connects the analysis to relevant
real-world situations.
Identify the strengths and weaknesses of modified internal rate
of return (MIRR).
Does not identify the strengths and weaknesses of MIRR.
Identifies the strengths and weaknesses of MIRR but omits key
elements.
Identifies the strengths and weaknesses of MIRR.
Analyzes the strengths and weaknesses of MIRR and connects
the analysis to relevant real-world situations.
Calculate the net present value (NVP) for a project.
Does not calculate the NPV for a project.
Calculates the NPV for a project using inaccurate or incomplete
information.
Calculates the NPV for a project.
Calculates the NPV for a project and explains the calculation.
Calculate the internal rate or return (IRR) and modified rate or
return (MIRR) for a project.
Does not calculate the IRR and MIRR for a project.
Calculates the IRR and MIRR for a project using inaccurate or

12. incomplete information.
Calculates the IRR and MIRR for a project.
Calculates the IRR and MIRR for a project and explains the
calculation.
Explain whether a project should be accepted or rejected, based
on the calculated IRR and MIRR.
Does not explain whether a project should be accepted or
rejected, based on the calculated IRR and MIRR.
Explains whether a project should be accepted or rejected,
based on the calculated IRR and MIRR, but omits key elements.
Explains whether a project should be accepted or rejected,
based on the calculated IRR and MIRR.
Analyzes whether a project should be accepted or rejected,
based on the calculated IRR and MIRR, and connects analysis to
relevant real-world situations.