Finance analysis - Essay Example

Only on StudentShare

Extract of sample
Finance analysis

In this study, it was required to compute the Net Present Value of a project for a given company and make a recommendation on whether the project is worthwhile or not. The NPV of a project is the difference between the present values of its cash inflows and its cash outlays. The NPV technique makes use of the discounted cash flow method and discounts the cash flows at the rate of the cost of capital (Smart & Megginson, 2008, p. 261). Additionally, this paper includes designing a capital budgeting model that can be used to evaluated similar projects. Research on Model Design The conventional use of financial models is to evaluate the financial feasibility of a proposed investment. Such models can be utilized to investigate the various investment alternatives that are available, in order to choose the most viable one. Generally financial models are designed to assess a particular capital budgeting project. Capital budgeting choices are supposed to be based on cash flows, instead of accounting profits. Additionally it is the incremental cash flows that are applicable. In general, a project is undertaken if the NPV of the incremental cash flows generated from it is found to be positive. However, there may be instances when a Company has multiple projects to choose from but due to budget constraint, the firm’s management might not be able to select all the projects that have a positive NPV. ...Show more

Summary

Finance Analysis Table of Contents Introduction 3 Research on Model Design 3 Capital Budgeting Model and the explanation of the Outputs 4 Conclusion 6 References 7 Introduction Capital Budgeting plays a crucial role in the business decisions of organizations…
Author : magalihowell
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

Related Essays

Finance (Analysis)
The analysis of these techniques would help in determining whether project should be accepted or rejected. Payback Period The initial investment of the company is calculated as $158,640,700. Payback period is the time in which the initial investment of the project will be recovered (Peterson, and Fabozzi, 2002)The company is able to recover its initial investment in 2.8 years and the rest of the stream after 2.8 years is Net cash inflow of the project.
8 pages (2000 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
FINANCE (RATIO ANALYSIS)
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
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT