Australian stock exchange

Assignment Help Corporate Finance
Reference no: EM13904018

1. List and briefly describe the three general areas of responsibility for a chief financial officer (CFO) of a selected non-financial company which is listed on Australian Stock Exchange (ASX). How those responsibilities can affect ultimate objective of the company. The name of company you chose should start with the first letter of your name, surname or middle name.  (Maximum of 1000 words)  

2. Chill Mount Creamery manufactures a variety of Ice creams. The company is considering introducing a new product (Yugo cream). The company’s manager has been provided with the following information by their business analyst.

? The project has an anticipated economic life of 5 years.

? The Company plans to spend $1,300,000 on advertising campaign to boost sales.

? The Company’s interest expense each year will be $500,000.

? The Company is required to purchase a new machine to produce the new product. The machine’s initial cost is $5,500,000. The machine will be depreciated on a straight 

line basis over 5 years. The Company anticipates that the machine will last for 10 years; the salvage value after 5 years is $500,000.

? Six months ago the Company also paid $300,000 to a firm to do research regarding new product.

? If the Company goes ahead with the new product, it will have an effect on the Company’s net operating capital. The forecasted net working capital will be $200,000 (at time zero)

? The new product is expected to generate sales revenue of $1,500,000, 2,500,000, 3,500,000, 4500,000 and 5,500,000 in year 1, 2, 3, 4 and 5 respectively. Each year the operating cost (not including depreciation) expected to equal 30 percent of sales revenue.

? In addition the Company expects with introduction of new product, sale of other ice cream increase by $500,000 after taxes each year. 

? The Company’s overall WACC is 7.5 percent. However, the proposed project is riskier than the average project; the new project’s WACC is estimated to be 10 percent.

? The Company’s tax rate is 30 percent.

? What is the net present value, internal rate of return, payback period, discounted payback period, and profitability index of the proposed project. Based on your analysis should the project be accepted? Discuss.

Reference no: EM13904018

Questions Cloud

Journalize exchanges : 2 Journalize exchanges of M/s X & Co. for the month of March 2009 on the premise of twofold section framework
Literature review about the following topic : Prepare your report in a professional, academic writing, manner/format. Demonstrate what you have researched and learned in a coherent fashion and communicate your ideas clearly. There are no ‘ideal’ or ‘recommended solutions’ to the topic areas you ..
Journalize the accompanying identifying : Journalize the accompanying identifying with April 2009
Different types of incorporated structures : Distinguish between the different types of incorporated structures and discuss the roles that various organisations play in the regulation of the company structures in Australia.
Australian stock exchange : List and briefly describe the three general areas of responsibility for a chief financial officer (CFO) of a selected non-financial company which is listed on Australian Stock Exchange (ASX)
Learn how to capture screen shots : Prepare your report at the same time as you create your software,Learn how to capture ‘screen shots’, trim the part you want, and then place these screen shots into a word document before you begin preparing your report
Ethical debate on our information privacy : We live in a world where the internet plays a pinnacle role in our day to day lives. Discuss how the internet has caused an ethical debate on our information privacy.
With reference to the corporations act 2001 advice following : The directors of Speciality Shoes Pty Ltd to the extent (if any) to which they are bound to comply with the company’s constitution (800 words); and Whether Speciality Shoes Pty Ltd will have to honour the contract over as it is over $250,000 that ha..
Articles on blackmores : The analysis is to be based primarily on 2012 Annual Report of the corporation and any other information you deem relevant e.g. newspaper and journal articles etc.This will require you to search for articles on Blackmores.

Reviews

Write a Review

Corporate Finance Questions & Answers

  Calculating returns and risknbsp on january 2 2001 you

calculating returns and risk.nbsp on january 2 2001 you purchased 500 shares of loewen group for 9.60 per share. the

  Project task analyze the market over the week what was

project task analyze the market over the week. what was driving the market? what do you think caused the changes in the

  Discuss the merits of bernsteins arguments

Discuss the merits of Bernstein"s arguments and apprehensions regarding reserves and explain how this perspective can be factored into an analysis of past earnings trends, estimates of future earnings, and the valuation of common stock.

  Evaluate an investment proposal

State that the discount rate could take into account inflation and risk. How would that work in practice. How would you come to a specific discount rate if you are the management accountant that has to evaluate an investment proposal?

  How do you interpret the net borrowing rate for the firm

How will this affect the decomposition of ROCE = Operating ROA + (Leverage X Spread)? How do you interpret the net borrowing rate for this firm?

  What is the wacc for the company

Preferred Stock and WACC The Saunders Investment Bank has the following financing outstanding and what is the WACC for the company?

  Discuss the effect of operating leverage

Starbucks in 2004 declared that it will increase rates at its stores before the year. Analysts expect rates to increase by 4% to 5 percent. Rates are going up to adjust for increases in dairy products & rents.

  What is required return using fama-french three-factor model

If the expected value of the size factor is 5% and the expected value of the book-to-market factor is 4%, what is the required return using the Fama-French three-factor model?

  Compare typical compensation and incentive arrangements

Compare typical compensation and incentive arrangements for (a) top management, for example, the CEO or CFO, and (b) plant or division managers. What are the chief differences?

  You have a preferred stock which has a callability feature

you have a preferred stock which has a callability feature after 10 years at 115.the dividend annually is 10. your

  Read carefully the case notes overleaf consider the

read carefully the case notes overleaf. consider the information shown in the appendix.determine how this information

  Examining financial statements of a corporation

Suppose you are examining financial statements of a corporation. You observe patent amortization cost of $1.5m and a loss on impairment of goodwill for $25m.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd