Analyse the company capital structure, Financial Management

1. Analyse the company's capital structure and critically assess different types of financing options available to the company. Calculate the cost of these different types of financial sources. Recommend currently which financing option is more justifiable for the company and explain how this can improve the overall business performance.

2. Critically analyse the company's performance in managing effectively its financial resources. Consider working capital management, accounts receivable management and financial control systems.

3. You are working for JD Printing Ltd., as a Finance Assistant and your manager asked you to perform an investment appraisal analysis on a new capital investment. The company is considering renewing one of their printing machines and they have found three possible options. You are required to evaluate these different options in your report and recommend one of them for purchasing. The company's cost of capital is 15% and the company usually accepts projects with payback period shorter than 5 years period. (2.1, 2.2, 2.3, 2.4)

Perform an investment appraisal analysis using some appraisal techniques (Payback period, Net Present Value, Internal Rate of Return etc.) Write a report on your evaluation and justify your recommendations.  

Table 1: The projections with regards to the printing equipments

 

Machine A

Machine B

Machine C

Price (£)

1,000,000

550,000

400,000

Expected economic life

6 Years

6 Years

6 Years

Year 1 revenue (£)

150,000

85,000

70,000

Year 2 revenue (£)

230,000

120,000

125,000

Year 3 revenue (£)

400,000

190,000

150,000

Year 4 revenue (£)

300,000

195,000

165,000

Year 5 revenue (£)

250,000

200,000

120,000

Year 6 revenue (£)

140,000

180,000

80,000

Scrap value (£)

150,000

40,000

Nil

 Table 2: Present Value Factors

Year/Rate

14%

15%

16%

17%

18%

19%

1

0.8772

0.8696

0.8621

0.8547

0.8475

0.8403

2

0.7695

0.7561

0.7432

0.7305

0.7182

0.7062

3

0.675

0.6575

0.6407

0.6244

0.6086

0.5934

4

0.5921

0.5718

0.5523

0.5337

0.5158

0.4987

5

0.5194

0.4972

0.4761

0.4561

0.4371

0.419

6

0.4556

0.4323

0.4104

0.3898

0.3704

0.3521

7

0.3996

0.3759

0.3538

0.3332

0.3139

0.2959

8

0.3506

0.3269

0.305

0.2848

0.266

0.2487

9

0.3075

0.2843

0.263

0.2434

0.2255

0.209

10

0.2697

0.2472

0.2267

0.208

0.1911

0.1756

Posted Date: 2/26/2013 2:33:46 AM | Location : United States







Related Discussions:- Analyse the company capital structure, Assignment Help, Ask Question on Analyse the company capital structure, Get Answer, Expert's Help, Analyse the company capital structure Discussions

Write discussion on Analyse the company capital structure
Your posts are moderated
Related Questions
Q. Show the Transaction risk? This is the risk occur on short-term foreign currency transactions that the actual income or cost may be different from the income or cost expecte

Certified Public Accountant (CPA) - ACCOUNTANT who has satisfied education, experience and examination requirements of her or his jurisdiction essential to be certified as a public

Q. Financial Management in Marketing Department? The marketing department of a firm is concerned with the ultimate activity of the firm Le. the selling of goods and services to

Many practitioners feel that instead of using only on-the-run issues, all treasury coupon securities and bills are to be used for constructing the theoretical spo

A yield spread between any two bond issues can be easily computed when the maturity date for both these issues is same. The yield spread between these two bond

Explain the implications of purchasing power parity for operating exposure. Answer: Determine if the exchange rate changes are matched by the inflation rate differential among

Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

Calculate Debt or Equity Ratio XYZ LIMITED Key data related to XYZ for last three years is as follows:   2011/12 2010/12

Assume Intel's stock has an expected return of 26% and a volatility of 50%, while Coca-Cola's has an expected return of 6% and volatility of 25%. If these two stocks were perfectly

What is the most conservative type of working capital financing plan a company could implement?  Explain. An all equity capital structure would be the mainly conservative type