Capital Budgeting Report and Analysis
Format: Report and Analysis
Submission: Submit report with CRA matrix to Assignment Minder. Note that you need to attach the Assignment Minder ‘assignment cover sheet’ to the front of the document wallet.
Submit Excel analysis file by either:
– Submitting a USB or CD containing the Excel file with your report to Assignment Minder. If using this method, you must ensure that the USB or CD is securely attached inside the document wallet.
When saving the Excel file, please ensure that:
– the file name includes your name and student number.
– the file is a .xls or .xlsx file (mac files, such as .numbers are not accepted).
Primitive Energy owns several coal seam gas reserves in south-west Queensland. As a relatively minor player in the Queensland Liquefied Natural Gas (LNG) market, Primitive does not have the capacity to transfer and process the gas for sale to international buyers. Instead, Primitive simply extracts the gas and then sells it immediately (at the well-head, which is at the surface) to one of the major gas companies operating in the area. Recently, Primitive entered into a contract to sell gas from one of its reserves for the next 12 years. The contract stipulates that the price is set at $3.50 per gigajoule in the first year and that the price will increase by 2.50% per year to adjust for inflation.
With this contract in place, Primitive’s management are currently trying to determine the optimal well type for extracting the gas. The choice has been narrowed to two types:
A-Type Wells: Drill 3 A-Type wells per year up to and including the beginning of the 9th year. Wells have a 4 year life. The project will operate for 12 years.
B-Type Wells: Drill 3 B-Type wells per year up to and including the beginning of the 10th year. Wells have a 3 year life. The project will operate for 12 years.
Primitive’s finance department conducted a preliminary discounted cash flow analysis of the wells (found in Analysis of Well Types.xlsx). Based on the annual equivalent (AE) figure for each type of well they have recommended that the B-Type well be selected because it generates the highest AE.
A member of the management team, who studied EFB210 Finance 1, believes that the analysis is flawed (wrong) and should be re-done. They have asked that you complete the following task.
Provide a detailed financial analysis that reports the net present value (NPV) that each well type generates over the full life of the project. In addition, you are to write a detailed but concise report. In completing this task, the manager has requested the following:
– The financial analysis is to be completed in Excel. The file is to be easily adjustable for different scenarios and all inputs must be in the one sheet called ‘Assumptions’ with the analysis of each well conducted on separate sheets.
– The report is to be short (600 words + 20% tolerance) and written in a manner that can be understood by a person with a basic understanding of financial analytical tools. It should have the following sections:
The ‘Methodology’ section must explain how the NPV was calculated over the project’s total life and must justify why this methodology is preferred over that used by the finance department.
– In making recommendations, the analysis and report must determine at what level of variable costs do B-Type wells become equivalent to A-type wells. Note: in doing this hold the variable costs of the A-type well fixed.
In order to prepare your analysis and report, your can refer to the information provided in the Analysis of Well Types xlsx file provided.
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.