StudentShare solutions
Triangle menu

Finance (Analysis) - Essay Example

Nobody downloaded yet

Extract of sample
Finance (Analysis)

However using discounted payback period, the company would be able to recover its initial outflow of the project in 3.47 years. The discounted payback period gives more accurate picture of the project feasibility because it takes present value of the future cash inflows (Trahan, and Gitman, 1995). Considering the investment required, the project should be accepted using the payback period technique. Net Present Value The Net present value of the project is $71,467,984. The value shows the difference between the initial outflow and present value of future cash inflow (Shapiro, 1978). Therefore, the management should undertake the project as the NPV is positive and very high so the project would increase the profitability of the company. Internal Rate of Return Internal Rate of Return of the project is calculated as 25%. This is the rate at which the net present value of all future inflows would be equal to the initial outflow of the project. It means the project is beneficial for the company because IRR is greater than the cost of capital which is 10% and therefore the project should be accepted. ...
Modified Internal Rate of Return The MIRR gives more accurate and realistic picture of the cost and profitability of the project because this technique assumes that the positive cash flows will be reinvested at cost of capital i.e. 10% in this case. The MIRR of the project is 18% which is also greater than the cost of capital. Thus, the project should be accepted. Recommendation The company should accept the project because all the project appraisal and capital budgeting techniques used to evaluate the feasibility of the project are showing positive results and therefore the project should be accepted. If company undertakes the project, it would be able to recover its initial investment in 3.47 years (inflation adjusted) which is beneficial for the company. After 3.47 years the project will give additional future cash inflows till the end of the project. NPV of the project is also favorable and is showing the healthy earning for the company. IRR and MIRR of the project are greater than the cost of the capital and indicating positive sign for the company to undertake the project. Profitability index of the Project is greater than 1 hence also supporting the project. Thus, the project should be accepted. MODEL DESIGN REPORT The model is prepared in Excel and it has been divided into three sections which are input, calculation, and output. All the information has been included in the input section by the user. Using input, calculation has been done through formulas and commands. The calculated result is then produced in the form of output. INPUT The model allows the user to enter the information as input in the excel sheet. The input section has been divided into seven areas. The production part comprises of price of product, units of ...Show more


REPORT TO MANAGER The cash inflow of the project shows positive stream throughout the project but the project cannot be accepted or rejected without looking only at the cash inflows. Therefore to find out whether the project is feasible for the company or not, various capital budgeting techniques have been used…
Author : christian47
Finance (Analysis) essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Finance (Analysis)"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Finance analysis
Generally, organizations make their investment decisions on the basis of the returns expected from those investments (Jaffe & et al, 2004, p. 167). There are number of methods that are widely used by companies to evaluate their available investments options.
4 pages (1000 words) Essay
Analysis of the role of the Manager in Health Finance
The major reason behind this is the evolving of the National healthcare systems in economic, cultural, political terms making it difficult for hospital management to organise, finance and deliver health care efficiently. Although some experts do not see the high and rising health care costs as a serious problem, most observers points out the negative impact of health care costs on both private and public hospitals and also on the government budget, and the relationship between the high health care costs and reduced access for people seeking health care services (Hsiao 1995).
8 pages (2000 words) Essay
Analysis of Current Issues in Finance
There are some scholars who have recognized various aspects which enable the company to create and execute a capacity to modify. Moreover, issues in leadership and responsiveness to external changes are very vital aspects for adopting a common understanding of the realistic and probable organizational environment.
5 pages (1250 words) Essay
Finance and Accounting: Analysis of BP
This paper provides an analysis of BP financial structure, its cash flows and the dividend policies.
10 pages (2500 words) Essay
Finance Analysis
In 1974 McDonald's opened its first restaurant in the UK. As of 31 December 2001, McDonald's and its franchisees operated over 1,184 restaurants in the UK1. B. Company History - McDonald's originated in California, USA. In 1954, Ray Kroc became a franchisee of the McDonald brothers (Dick and Mac) and began opening new restaurants, buying all the rights to the McDonald's concept in 1961 for $2.7 million2.
4 pages (1000 words) Essay
Finance Analysis of McDonalds
The paper gives the capital structure of McDonalds. It contains the overview about the business of the company, its evolution, organization structure etc. All the calculations performed are supported by graphical representations apart from the comments in order to give a clearer picture about the company’s financial performance and management efficiency.
10 pages (2500 words) Essay
In order to get a better view of its financial health, its results will be compared to its close competitor, Cobham Plc. In the end, future outlook will also
7 pages (1750 words) Essay
Finance analysis
Shell Plc and ExxonMobil are insuperably brand names, each of these companies holds a very high position amongst market capitalization on the respective indices, very respectively these companies also have successfully been able to generate faith amongst their shareholders in
6 pages (1500 words) Essay
Finance analysis
Study uncovers the problems that led to losses of the airline industry. Tools of analysis are financial ratios which will be compared against their historical data to measure growth of
10 pages (2500 words) Essay
Quantitative Analysis for Finance
The outcomes predicted by SPSS, find that every pair of tourist revenue variables, i.e., (REVFRANH, REVFRANB), (REVFRANB, REVGERMB)
4 pages (1000 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Contact Us