| Course | BUSI 320 Finance Principles (BUSI320) |
|---|---|
| Module/Week | 6 |
| Assignment | Discussion Board Forum 3 |
| Paper type | Discussion thread with two replies |
| Length | about 480 words (thread and replies). Course guide: a thread of at least 250 words demonstrating course-related knowledge with at least 2 citations in current APA format, plus replies of at least 100 words to 2 classmates |
| Format | APA 7 citations and reference list |
| Points | 25 |
| School | Liberty University Online |
| Program | BS in Business Administration |
| Where it sits | Module/Week 6 in Liberty's published BUSI 320 course guide; current sections can differ |
| Updated | October 2026 |
Free sample paper for BUSI 320 Week 6
Discussion Board Forum 3: Capital Budgeting Methods in Practice
BUSI 320 Finance Principles, Discussion Board Forum 3 (Thread and Replies)
Thread by [Student Name]
The equipment proposal and the classmates are composites; the textbook, research and Scripture cited are real.
Thread
A capital project should be judged mainly by its net present value, with payback as a secondary check on liquidity. A composite machine shop is considering a $100,000 cutting machine expected to save $30,000 a year for five years, with no salvage value, and its cost of capital is 10 percent.
Payback is the simplest measure: $100,000 divided by $30,000 a year is about 3.3 years. Net present value discounts each year's savings to today. The present value of $30,000 a year for five years at 10 percent is about $113,700, so the NPV is about $13,700, and Block et al. (2017) treat a positive figure as the signal that the machine returns more than the shop's investors require. Solving for the rate at which the savings exactly repay the machine gives an IRR a little above 15 percent, well clear of the shop's 10 percent hurdle. All three methods favor the machine, but they would not always agree. A project with large cash flows after year four could have a long payback yet a high NPV, and payback would wrongly reject it.
Real firms use these methods together. In the CFO survey by Graham and Harvey (2001), roughly three in four respondents leaned on discounted cash flow measures as a matter of routine, yet a majority still computed payback, and smaller companies leaned on it most. Payback survives not because it is correct but because it answers a question cash-poor owners care about: how soon do we get our money back?
Scripture links this kind of analysis to stewardship. A proverb tells the shepherd to keep close watch over the herd because wealth can slip away (English Standard Version Bible, 2001/2016, Proverbs 27:23-24). Careful capital budgeting is how a business keeps track of its flocks.
Reply to Kevin
Kevin, your NPV analysis of a new delivery van was well laid out. One question is whether the same 10 percent rate should apply to every project. Block et al. (2017) explain that riskier projects should be evaluated at a higher, risk-adjusted discount rate. Replacing an existing van is low risk, but expanding delivery into a new town is riskier, and using the same rate for both would make the expansion look better than it is. What rate would you use if the van were for an untested new route?
Reply to Alyssa
Alyssa, your thread recommended accepting a project because its expected NPV was positive. I would add a look at the range of outcomes. The chapter on risk suggests testing a project under pessimistic and optimistic scenarios, because a positive expected NPV can hide a serious chance of loss. If the project's NPV turns sharply negative when sales are 15 percent below forecast, a cautious owner might want a smaller first phase. Graham and Harvey (2001) found that many firms adjust for risk informally through such sensitivity analysis. Did you test your project's sales assumption?
References
Block, S. B., Hirt, G. A., & Danielsen, B. R. (2017). Foundations of financial management (16th ed.). McGraw-Hill Education.
English Standard Version Bible. (2016). Crossway. (Original work published 2001)
Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: Evidence from the field. Journal of Financial Economics, 60(2-3), 187-243. https://doi.org/10.1016/S0304-405X(01)00044-7
What the BUSI 320 Week 6 instructions ask
BUSI 320 reaches capital budgeting in Module/Week 6, where Block and coauthors explain how to judge long-lived investments and how to allow for their risk, while Connect Exam 3 falls due. The final forum keeps the same length and citation rules as the first two. Capital budgeting lends itself to threads that work a small example, since the methods can be compared directly. Many classmates will choose equipment or expansion decisions from their own workplaces, which gives the replies real material. Exam preparation and the thread reinforce each other. Replies follow the same rules. Net present value is the usual tool.
How this BUSI 320 Week 6 example is built
The thread evaluates one investment three ways and shows the arithmetic for each, so readers can see why the methods agree or disagree. It then explains the strengths and blind spots of payback compared with the discounted methods, drawing on the textbook. Survey evidence from chief financial officers shows what firms actually use, and a proverb about diligent oversight ties careful analysis to stewardship. Each reply adds a point the classmate's thread missed, one about adjusting the discount rate for risk and one about using scenario analysis rather than a single forecast. The scenario of later cash flows shows exactly when payback and net present value would disagree. Replies push the classmates toward risk-adjusted rates and scenario testing.
BUSI 320 Week 6 grading rubric: where the points go
Instructors grade the forum on a thread of at least 250 words that applies the chapters' methods accurately with two APA citations, and on two replies of at least 100 words that add substance. Correct discounting, clear presentation of cash flows and an accurate explanation of each method's logic matter most. A thread that names the methods without applying them, or that misstates how net present value treats risk, earns less. Replies should test or extend a classmate's analysis with a number, a source or a question. Stating the cost of capital used, and why, makes the analysis easier to evaluate. Replies that question an assumption, such as the discount rate or the sales forecast, show the habits capital budgeting requires.
BUSI 320 Week 6 help: mistakes that cost points
Use a small project with a few years of cash flows so the calculations stay readable, and show the discount factors or the spreadsheet result. Compare at least two methods and explain any disagreement. Add a journal source on how firms really make these decisions, and consider a biblical citation about stewardship if it fits. In replies, check the classmate's discount rate and assumptions. Mind the minimums for the thread and both replies, and finish them ahead of the third exam. If you use a spreadsheet function such as NPV or IRR, report the inputs so others can check the result. Short paragraphs with one calculation each make a numbers-heavy thread easy to follow.
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BUSI 320 Week 6 questions, answered
What is BUSI 320 Discussion Board Forum 3?
The last BUSI 320 forum, worth 25 points, asks students to evaluate capital projects in a sourced thread and answer two classmates.
Where can I find a free BUSI 320 Week 6 sample paper?
You can read a whole BUSI 320 Week 6 forum here, evaluating a machine purchase with payback, NPV and IRR, with two replies.
Which capital budgeting methods do companies use?
Most big-company finance chiefs report relying on discounted cash flow, net present value and IRR, but payback remains common, particularly at smaller firms.
Why is payback still used if NPV is better?
Owners short on cash want to know how fast an investment returns their money, and payback answers that directly, even though it treats a dollar in year three like a dollar today and ignores later years.
What else is due in BUSI 320 Module/Week 6?
Connect Exam 3, Connect Homework 6 and LearnSmart for chapters 12 and 13 are due, with Block et al.'s capital budgeting chapters and one presentation.
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