Phase 3 DB - Assignment Example

This report includes the notes to the financial statement of the company and the comparative analysis of the new business expanse intent of the Apex Inc. It also discusses the profitable outcomes for the shareholders and the bondholders. Introduction Apex Printing Inc. is the privatized United States printing company which cater the printing of research papers, newspaper inserts, journals and magazines, periodicals and the advertisements that incorporate Sunday and weekly circulations of metropolitan newspapers. Apex Inc., headed by the CEO John Mathews generates a revenue of 450 million US $ per annum based on three main product lines namely the periodicals, inserts and the advertisements.

This company holds long contractual relationships with several U.S retailers for the vast production on a large scale. Recently in a meeting with the CEO and Vice President of the Sales Administration James Simeon, an initiative was put forward in the intent of the further expanse of the product line of Apex Inc. and to carry out productions in a different streamline: food packaging and following a different preplanned strategy. The meeting was soon followed by another meeting with the CEO and the VP of Production and Supply Chain, Luke Stewart. . Mathews.

However Mr. Mathews pointed out that Mr. Stewart view on long term profit was only possible if the project has been carried out successfully and with the striving attitude to include perfection in it. To discuss further on the this proposal I hereby, the VP finance am required to submit an initiative report to the CFO of the incorporation in this matter highlighting the finance statement and the discussion of the project’s details and the end result and henceforth making a satisfactory attempt to persuade the shareholders and the bondholders for the gain of their valuable investment in this project.

Method: The current profit-loss status of the Apex Inc. is not vary much commendable however one also refrain from grading it as below average. But, owing to the present circumstances and the new inceptive of the expanse of the business approved by the CEO, I am here to give you a brief description of the present state of the company and the cost to implement the newer project in pursuit of stabilizing the incorporation’s profits. Given here are the formulas for the calculation of the net present value (NPV) and the internal rate of return (IRR) of the expanse of Apex Inc.

followed by the cost description of the food packaging project. When cash inflows are even (NPV): NPV = R ? 1 ? (1 + i)-n ? Initial Investment i In the above formula, R is the net cash inflow expected to be received each period; i is the required rate of return per period; n are the number of periods during which the project is expected to operate and generate cash inflows. When cash inflows are uneven: NPV = R1 + R2 + R3 + . ? Initial Investment (1 + i)1 (1 + i)2 (1 + i)3 Where, i is the target rate of return per period; R1 is the net cash inflow during the first