Finance Project - Essay Example

Only on StudentShare

Extract of sample
Finance Project

As the project considers a period of ten years critical evaluation is required to decide the outcome of the project. Analysis: 1. The expected cost for the project: Year Expected cost(in million dollars) 1 25 2 28 Opportunity cost of the project= 8% Present value of the cost of the project: Cost (i) Discounting factor at 8 % (ii) Present value (i*ii) 25 0.926 23.15 28 0.857 23.996 2. Present value of the after tax cash profit: Year( i) Cash flow(after tax) (in million $) (ii) Discounting factor at 8% (iii) Present value(ii*iii) 3 6 0.794 4.764 4 7 0.735 5.145 5 8 .681 5.448 6 9 0.63 5.67 7 9 0.583 5.247 8 9 0.541 4.869 9 9 0.5 4.5 10 9 0.463 4.167 11 9 0.429 3.861 12 9 0.397 3.573 Total present value of cash flows=$47.244. Discounting Factor values (Present Value of an Ordinary Annuity Table, n. d) 3. Expected Net present value= Present value of the total cash inflow-the present value of the total cash outflow= 47.244-(23.15+23.996) (Kapil, n. d, p.399) = $ 0.098(in millions) As the figure here reflects a positive NPV so the project will be beneficial to the organization and should be accepted. ...
Download paper

Summary

Final Project: Power Co Introduction: PowerCo, a medium sized generator and seller of electricity in the United States is aiming to build a new generator for the increased consumption of electricity in the area. In order to find how much beneficial the project will be for the company, financial projections were conducted by the treasury department…
Author : kathryne60

Related Essays

Finance and Accounting Essay: Corporate Social Responsibility
20 pages (5020 words) Essay
Cash and accrual accounting
5 pages (1255 words) Essay
Gentiva Health Services Financial Analysis Report
10 pages (2510 words) Term Paper
International Finance International Investing Project
3 pages (753 words) Research Paper
Applied Finance 2011/2012 Research Project
4 pages (1004 words) Essay
Finance-Whether to undertake a project or not
8 pages (2008 words) Research Paper
Governance and Risk in Finance, Term Project 1
9 pages (2259 words) Essay
investment project- Finance
5 pages (1255 words) Essay
Group Project Finance
4 pages (1004 words) Essay
Finance project
3 pages (753 words) Essay
Problem Solving
1 pages (251 words) Assignment
Using data for Sainsburys plc, critically evaluate the relative strengths and weaknesses of internal performance measurement techniques and those relying on external performance measures
4 pages (1004 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!