Under the assumptions create a project viewpoint capital budget and a parent viewpoint capital budget. What do you conclude from your analysis?

Hermosa Beach Components, Inc. of California exports low density

The Project Viewpoint Capital budget:

Cash Flow From Project = $50,000

The initial investment is a minimum of -$200,000

Net Present Value (using 10% Discount Rate) = -142,955.97 $

The Parent’s View: Capital Budget

Cash Flow from Parent’s Share of Equity Investment= $25,000
Initial Investment in Parent’s Share of Equity Investment=- $100,000
Net Present Value (using 10% Discount Rate) = -71.477.99 dollars

The analysis shows that, on its own, this project does not represent a good investment either for the business or shareholders. This project would be a bad investment for the company and its shareholders if we did not have more detailed information. It is important to note that this conclusion holds true for parents, whose net-present value calculations show a substantial decrease in comparison to their original investment due to reduced cash flows received from the equity investments.

It is important to look at all aspects when making investment decisions. Small changes, like different discount rates or amount invested can result in drastically different results when viewed from the project’s and parent’s perspective. Additionally , taking into account wider macroeconomic conditions may also offer valuable insights into potential risks & opportunities associated with investing thus providing investors with better idea whether particular asset class would be suitable option given current/future outlook . Ultimately , having sound financial strategy based off thorough research & careful consideration applied towards weighing up pros cons every situation will help ensure best possible returns achieved without putting too much pressure on finances during process.