Case study Essay example
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Finance & Accounting
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A Case Study on Perry Rose Plc Name: Course: Professor: University: City and State: Date: A Case Study on Perry Rose Plc Introduction This is a case study of the Perry Rose Plc that is located in Bromsgrove Surrey. This report will involve answering of all the three studies that have been presented in the case study…

Introduction

o 600,000 sterling pounds, adding this amount to the working capital of 180,000 pounds amounts to an initial cost of 780,000 pounds. The overheads have been adjusted from the previous 47,000 pounds to 30,000 pounds in a year. Question One b i) Pay back Year Cash flow ? (?000) Cum. CF ? (?000) 0 (600) (600) 1 147,000 (453) 2 157,000 (296) 3 157,000 (139) 4 187,000 48 5 187,000 23 3 years and (139/ 187) x 12 3 years and 8.9 months ii) Net Present Value Year Cash flow ? DF 12% PV ? 0 -600,000 1.000 -600,000 1 147,000 0.893 131,271 2 157,000 0.797 125,129 3 157,000 0.712 111,784 4 187,000 0.636 118,932 5 187,000 0.567 106,029 The net present value is -6,855 pounds. Question One C Using NPV to make decisions regarding the investment of a project is advantageous in that the NPV takes into consideration the time value of money and gives priority to the risks that will be involved as well as the profitability of the project. ...
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