Due Week 10, Day 7 (225 points)
The specific course learning outcomes associated with this assignment are:
• Determine how capital budgeting is used in long-term financial decisions.
• Apply management accounting concepts to identify and process relevant financial
information for decision-making purposes.
• Use technology and information resources to research issues in financial reporting and
analysis.
• Write clearly and concisely about financial reporting and analysis using proper writing
mechanics.
Assignment:
Sophie Morgan, President of Cayuga Cookies, Inc. (CCI), was trying to decide whether to expand
the company by adding a new product line. The proposal seemed likely to be profitable and
adequate funds to finance it could be obtained from outside investors.
CCI had long been regarded as a well-managed company. It had succeeded in keeping its
present product lines up to date and had maintained a small but profitable position in a highly
competitive industry.
The amount of capital presently employed by the company was approximately $4,000,000, and
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