Generate the cash flow of companies, Accounting Basics

Rondo plc, a sports apparel manufacturer with a cost of capital of 13.75%, is looking to expand its activity and is considering two possible countries to open a sales subsidiary. Rondo only has the ability to raise £1,300,000, which is the amount required to open each of the subsidiaries, so it needs to choose between the two investments, which are expected to generate the following cash flows:

Year

Country Far Away

(in £'000)

Country Nearby

(in £'000)

1

600

200

2

600

300

3

600

1,000

4

750

1,500

Make a recommendation to Rondo, plc as to which project it should implement, including an indication of whether that decision should be different in case the cost of capital changes in the near future.

 

 

 

Posted Date: 3/18/2013 5:11:39 AM | Location : United States







Related Discussions:- Generate the cash flow of companies, Assignment Help, Ask Question on Generate the cash flow of companies, Get Answer, Expert's Help, Generate the cash flow of companies Discussions

Write discussion on Generate the cash flow of companies
Your posts are moderated
Related Questions

Q. Last-in first-out inventory? LIFO (last-in first-out): Ending inventory contains of the oldest costs. LIFO presumes that the costs of the most recent purchases are the first

A company absorbs overheads on machine hours that are budgeted at 11,250. The budgeted overhead is $281 250.  Results illustrate actual hours of 10 980 and overhead of $276 652.

Concept of Conservatism: The concept of conservatism, also termed as the concept of prudence, is frequently stated as "anticipate no profit, give for all possible losses". It

Q. What is journal? In explaining the rules of credit and debit we recorded transactions directly in the accounts. Every ledger (general ledger) account shows only the increase

Q. What is Sales revenues? The sale of goods takes place between two parties. The seller of the merchandise transfers them to the buyer in exchange for cash or a promise to pay

The industrial revolution in England presented a challenge to the development of accounting like a tool of industrial management. Costing techniques were urbanized as guides to man

Determine the concept of Closing entries-(REID) 1)  Close Sales account and other income statement accounts with credit balances to Income Summary. 2)  Close each expense ac

Explain about the payroll register This is a summary of gross earnings, deductions and net pay for all employees for a specific payroll period. Register illustrates all amounts

Received $170,000 cash from Electronic Arts, Inc. for service revenue earned in January.