WMBA 6070 · Week 5

WMBA 6070 Week 5 capital budget memo example

Managerial Finance Walden University Free custom sample in 24 to 48h

The Week 5 case in WMBA 6070 hands over a project with a price tag, a stream of cash flows and a stated life, then asks for a verdict. The finished memo carries the discounted result, one or two supporting measures, a short sensitivity run, and a paragraph committing the firm to funding the project or leaving it alone.

What this page holds

Everything in the memo aims at one sentence a manager could act on, which is why the sensitivity run counts for more than a third decimal place on the discounted total. Searches like "wmba 6070 week 5 assignment example", "wmba6070 week 5 sample" and "wmba 6070 week 5 example" land here.

What a finished WMBA 6070 Week 5 capital budget memo looks like

Two to four pages in memo format, with the verdict in the subject line or the opening sentence rather than saved for the end. A cash flow table runs across the project's life, showing the outlay in year zero, the operating flows after tax, working capital released at the close, and a salvage line where the case provides one. Discounted amounts sit in an adjacent column and total to a single figure. Supporting measures follow in a compact list, typically an internal rate and a discounted payback, each with one sentence saying what it adds. A sensitivity block shows the result at two or three alternative assumptions, laid out so the reversal point is visible. The final paragraph funds the project or declines it.

How a WMBA 6070 Week 5 example is structured

The table is the memo's spine and gets built before anything is written. Each item from the case is placed in the year it occurs, with the treatment of depreciation, taxes and working capital settled first, because those three are where the flows go wrong and no later paragraph can repair a mistimed number. The discounted column uses the rate carried forward from the cost of capital work, referenced back to it rather than derived again. Only then does the prose start, and it starts from the verdict. Supporting measures are chosen for what they contribute to a reader instead of for completeness: a payback figure earns its line when the case mentions a liquidity constraint and is dead weight when it does not. The sensitivity block is built last and read first.

The verdict is in the first line

A reader learns the recommendation before the table, either in the subject line or in the opening sentence, and the rest of the memo supports it. Holding the answer back until the final paragraph is a habit from academic essays, and it costs points under criteria written for management documents.

Flows placed in the year they occur

Outlay in year zero, operating amounts after tax in the years they arrive, working capital recovered at the end, salvage net of its tax effect. Most of the technical damage in this week happens here, and a flow entered one year early quietly changes the total by more than any argument in the prose can offset.

The rate comes from Week 4

The discount rate is the one the cost of capital memo defended, cited as such, not a fresh figure invented for this case. Sections notice the inconsistency immediately when the two documents disagree, and the discrepancy reads as evidence that neither number was ever believed.

A reversal point, not a range

The sensitivity block names the value at which the recommendation turns over: the discount rate that zeroes the total, the sales volume that stops covering the outlay. A block showing three scenarios that all agree with the base case demonstrates the model ran but reveals nothing about where it is fragile.

Supporting measures that earn their line

Each additional measure appears with a sentence saying what it contributes that the discounted total does not. An internal rate speaks to a return threshold, a discounted payback speaks to a cash constraint. Measures listed without that sentence read as output pasted from a template.

Where marks go in WMBA 6070 Week 5

Sections mark this case on commitment. A memo reporting a positive discounted total and closing on a summary of its own calculation loses the application band outright, because nothing in it tells the firm what to do. The verdict has to be a sentence with a subject and a verb, naming the project and the action. The sensitivity block carries the next largest share: showing the assumption at which the result turns over is what demonstrates the model was understood rather than filled in. Mechanical bands sit under those, covering after-tax operating flows, the outlay placed in year zero, and agreement between the rate here and the one defended earlier. A payback figure offered as evidence of worth rather than of liquidity costs points every time.

Get a WMBA 6070 Week 5 example written to your instructions

Attach the Week 5 case file, the rubric, and the rate your section wants used if one was given, and a finished capital budget memo is returned inside 24 to 48 hours, the first at no cost. Where a spreadsheet has to accompany the memo, the sample ships with one whose cells recompute when an assumption is changed.

WMBA 6070 Week 5 questions, answered

Do all three measures have to appear?

Only where the rubric lists them. The discounted total is universal in this week, while an internal rate and a payback figure show up in roughly half of sections. Adding an unrequested measure costs nothing when it comes with a sentence explaining its contribution, and costs a little when it appears as a bare number in a list nobody asked for.

What happens when the project's result is negative?

The memo declines the project and says so plainly, which is a full-credit answer. Cases in this week are frequently built to fail at the stated rate. The trap is assuming an error, adjusting an assumption until the total turns positive, and never mentioning the adjustment, which costs far more than a clean rejection ever would.

How many scenarios does the sensitivity block need?

Two beyond the base case is the usual expectation and three is plenty. What matters is that each moves one variable at a time and that one of them crosses the decision point. Five scenarios all leaving the verdict untouched demonstrate less than a single one showing where the project stops paying for itself.