Entrepreneurial Small Business 2nd Edition by Jerome Katz , Richard Green

Exercise 4

Contact a dealer who sales expensive capital assets, such as earth moving or transportation equipment. Find out the costs of acquiring, owning, operating, and disposing of the asset. Use a spreadsheet program to estimate the amounts and timing of the whole life costs of the asset. Estimate the cash inflows that the asset will produce. Use your estimates of costs and cash inflows to calculate the NPV, IRR, ROI and payback of the asset. Make a presentation to your class, detailing the calculations you have made.