Analysis of the project if continued with only new product with optimistic sales figures - Essay Example

Free

Extract of sample
Analysis of the project if continued with only new product with optimistic sales figures

A lot of capital budgeting techniques are used to analyze the capital investments among them the most popular ones are net present value and internal rate of return. The net present value can be described as the excess of present value of cash inflow over the present value of cash out flow (Bringham and Ehrhardt, 2010, p.383). In this project the investment decision has been taken by both net present value method and the internal rate of return method. The incremental cash flows have been prepared with the help of the projected sales and costs figures. While computing the incremental cash flows the expenses regarding the research and other expenses done before the implementation of the project as these expenses are sunk costs and does not depend upon the implementation of the project. The main calculations have been done on the base or most likely projections. The tax shield which is required to calculate the cash flows have been computed as per the tax provisions as the main objective of the analysis is to determine the exact cash flow position due to the implementation of the project. ...
Download paper

Summary

Case Study Contents Case Study 1 Contents 2 Executive summary 3 Project acceptance or rejection 4 Analysis of the project if continued with only new product with optimistic sales figures 4 Analysis of the project if project with only new product 5 Analysis of the project if project implemented with contract manufacturing and pessimist sales of new product 6 Recommendations 6 Reference 7 Executive summary The capital budgeting decision is a very critical an important decision…
Author : telly31
Download 0

Related Essays

Business plan: Product Budgeting Project
Some of the assumptions taken to complete the product budgeting practice are stipulated below. Assumptions 1. The product is made up of the two raw materials named Beflow and Affton. 2. Two kinds of labour are used in the production process of the product, which are skilled and non-skilled labour. 3. For capital expenditure, since this is the first year of operations, therefore, the organization has planned to invest only in the furniture and equipments. The requirement for having a factory is fulfilled by arranging a facility on rent. 4. Selling price of the product is set as ?130 and ?140...
14 pages (3514 words) Essay
Capital Budgeting PROJECT ANALYSIS
The company’s target market will be the students and friends of the college. The students will be offered the skis at a discounted rate of $250, and the outsiders will purchase the skis at $600. Since the project will be generating revenue, there will be no need of finding other means of funding as the project’s operations are anticipated to generate enough revenue that will be ploughed back as a means of funding. The project was selected for the following reasons: First, project will be beneficial to college in terms of learning and management to the students because they will be exposed...
4 pages (1004 words) Essay
Financial analysis of bSKYb 2012(only profitability ratio analysis part see instruction)
U.K: Intellect Books 10 1.0 Executive summary This present paper is a report that has been prepared from the standpoint of financial analysts working for a Merchant Bank. In the report, the financial analysts provide advice to the pension fund managers in regards to whether it is a viable or a good strategic business decision to make a considerable investment in BSkyB Corporation. The size of the investment is still a matter of discussion but if the report recommends for the investment in BSkyB then the pension fund managers will seek to purchase up to a maximum of 3% of the total issued share...
6 pages (1506 words) Essay
Sustainability Financial Analysis Project
3). While assessing and selecting companies for inclusion to the DJSI, various corporate economic, environmental and social performance factors are taken into consideration. These factors include, but are not limited to: corporate governance, brand management, risk and crisis management, climate change mitigation, supply chain management, strategy for emerging markets, environmental policy, water related risks, raw material sourcing, human capital development, social reporting (DJSI Annual Review, p. 50). All these and other factors specific to each industry belonging to the three pillars...
12 pages (3012 words) Research Paper
New York City Project Part 4
Similarly, the economic recovery of the city as reflected by the improved activities at Wall Street would enable the local government in attaining the projected revenue in the budget drawn (Hillman, 2009). Consequently, the ability of the New York City local government to deliver services to the population of the city is strong due to the availability of funds to finance the government operations. Indeed, the economic recovery within the city saw the revenue collection forecast for the fiscal year of 2012 exceeding by $2.4 billions that will be useful in closing the financial gap of 2013...
4 pages (1004 words) Essay
New York City Project Part 1
Due to lack of adequate money to do it all, the budget reflects the priorities of the city’s elected representatives. And I consider the city council of New York City has a comprehensive plan because that the New York City Charter ("the Charter") vests the responsibility for preparing an annual expense and capital budget with the mayor. The mayor must then submit the expense and capital budget to the City Council for its review and adoption. It shows that the process of making a budget has to be rigorous enough to be implemented (Christine, 2013). Besides, each budget must consist of several...
3 pages (753 words) Essay
Financial Calculations for a new hair care product
And all the products have to pass through research along with the specific product development phases. Keeping in view these facts, the above table shows a list of assumptions made for the development of the hair care product. Moreover, these assumptions would serve as the baseline for calculating the revenue and costing of the product, marginal costing, sales / production basis and the break even analysis (Bernstein and Wild, 2000).Breakeven point Calculations:-
...
5 pages (1255 words) Assignment
Got a tricky question? Receive an answer from students like you! Try us!