**Field**: Business & Finance

*For your answer to be accepted you must complete the ENTIRE assignment as it is outlined below. This includes a spreadsheet with formulas and a paper.*

*Capital Budgeting Case*

## Your company is thinking about acquiring another corporation. You have two choicesâ€”the cost of each choice is $250,000. You cannot spend more than that, so acquiring both corporations is not an option. The following are your critical data:

*Corporation A*

## Revenues = $100,000 in year one, increasing by 10% each year

## Expenses = $20,000 in year one, increasing by 15% each year

## Depreciation expense = $5,000 each year

## Tax rate = 25%

## Discount rate = 10%

*Corporation B*

## Revenues = $150,000 in year one, increasing by 8% each year

## Expenses = $60,000 in year one, increasing by 10% each year

## Depreciation expense = $10,000 each year

## Tax rate = 25%

## Discount rate = 11%

## Compute and analyze items (a) through (d) using a Microsoft Excel spreadsheet. Make sure all calculations can be seen in the background of the applicable spreadsheet cells. In other words, leave an audit trail so others can see how you arrived at your calculations and analysis. Items (a) through (d) should be submitted in Microsoft Excel; indicate your recommendation (e) in the Microsoft Excel spreadsheet; the paper stated in item (f) should be submitted consistent with APA guidelines.