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Corporate Finance Case Study
Finance & Accounting
Pages 11 (2761 words)
Roger Davis is a financial analyst for a division in a company. He is having a tough time convincing the management for a project proposal. …
The analysis done by the accountant has been revisited in this report taking into account all additional information available and using discounted cash flow technique. However, the Net Present Value of the project was still found to be unfavourable. Thereafter, all the information was deeply investigated and certain pieces of information were found to be irrelevant or unfair for taking the investment decision. After eliminating those pieces, it was found that the NPV was favourable. Moreover, other analysis methods also proved the project to be profitable. After financial analysis, impact on other project has been assessed. The report is limited to only the parameters needed for the same. Any comments can’t be made on the same with given information. Lastly strategic factors have been assessed and recommendations have been provided to Roger.
Roger Davis, the financial analyst for Steel Tube division of Engineering Products Plc, needs to convince his managing director about the viability of a new proposal for computer numerically controlled (CNC) milling machine. The MD is not ready to spend money on the project unless it can start yielding profits within 3 years. However, the accountant’s analysis shows an overall loss for the project over the next 4 years. It won’t be prudent to expect much from the project after this period. Roger has collected a lot of additional information as well. ...
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