1. Describe the methodology that both Reardon and Blake use to evaluate the TLG Project. Do you find it acceptable? They both use ROI (Return On Investment) method to evaluate the TLG Project. ROI is a way to consider the profits in relation to the invested capital. Reardon and Blake both take the factors such as inventories, new plants and equipment, and accounts receivable etc. into consideration before making the marketing decisions. It’s acceptable since these factors can directly affect the
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statement, Statement of Cash Flow and Retained Earnings Statement. These reports are very important to the business. Financial Statement will show a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business received its revenues and expenses through both operating and non-operating activities. It also shows the net profit or loss incurred over a specific accounting period. Statement of Cash Flows will show me
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Goitisolo Sopeña Student Identity Card: 299802 Stuttgart, 20.01.2012 Stuttgart, 20.01.2012 Table of Contents Assignment 1: D’Leon Inc. – Financial Statements and Taxes 1 Assignment 2: Allied Food Products – Capital Budgeting and Cash Flow Estimation 7 Annex 12 Affidavit 13 Assignment 1: D’Leon Inc. – Financial Statements and Taxes A. What effect did the expansion have on sales, after-tax operating
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1. Net Present Value: Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows. NPV compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. NPV is calculated using the following formula: NPV= -C0 + C11+r+ C21+r2+…+ Ct(1+r)t - C0 = initial investment C = cash flow r = discount rate t = time If the NPV of a prospective project is positive, the
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AC505 - Capital Budgeting Problem Data: Cost of new equipment Expected life of equipment in years Disposal value in 5 years Life production - number of cans Annual production or purchase needs Initial training costs Number of workers needed Annual hours to be worked per employee Earnings per hour for employees Annual health benefits per employee Other annual benefits per employee-% of wages Cost of raw materials per can Other variable production costs per can Costs to purchase cans - per can Required
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Financial Effects and Constraints Health care organizations throughout the world are facing many financial challenges. Management has to find ways to streamline processes, reduce waste, and bring profit to the organization. Pharmacies in the health care system tend to be one of the major departments that bring in a very large amount of revenue for an organization. Therefore, it is extremely important for management to focus on processes that will result in the smooth operation of the pharmacy
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it be important to review and assess (post audit) a firm’s decisions? What are some of the pitfalls associated with such a task? 3. Cite and briefly discuss six factors that can be especially difficult to quantify for inclusion in a capital budgeting NPV calculation. 4. Cite and briefly discuss potential pitfalls encountered in estimating the value of future investment options, in the context of our warning about real options. Problems 5. A potential investment’s NPV is –RM2 million
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(a) the sales using 3 formulas , i think first we used Current Ration to find Total Liability , then Quick Ratio to find Inventories then Inventory turnover to get the sales (b) the DSO first we must find the Receivables = Total assets - (cash & short-term investments + inventories) then find the DSO = Receivables / sales / 365 Q3- [7.5 marks] (a) define LRP (b) similar question to 1-4 Q4- [7.5 marks] the same question as 6-1 Q5- [7.5 marks] the same
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Capital Budgeting Techniques Solved Problems 1. Given below are the cash flows of a project: Year Cash Flow 0 (100,000) 1 20,000 2 30,000 3 40,000 4 50,000 5 30,000 The minimum hurdle rate (cost of capital) of the project is 12%. Calculate the (a) Net Present Value, (b) Internal Rate of Return, (c) Profitability Index, (d) Modified Internal Rate of Return. Solution: (a) NPV @ 12%: Year (1) 0 1 2 3 4 5 Cash Flow (2) (100,000) 20,000 30,000 40,000 50,000 30,000 PVIF @ 12% (3) 1.0000 0.8929 0.7972
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Introduction “Cash is king" is a common line found in the business world. Cash flow is the life-blood of a company and without it a company will fail (Hicks, 2012). There are many things that can occur that makes companies take risks that could potentially jeopardize their cash flow such as new projects, growth, capital budgeting. The Chief Financial Officer (CFO) of TaxCats, a struggling tax preparation company is assigned to fix the problem and help with the company’s cash flow. The company
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