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Gabriel plc has an annual turnover of Rs 3 million and a pre-tax profit of Rs 400,000. It is not quoted on a stock exchange and the family that own all the shares have no intention of permitting sale of shares to outsiders or provided that more finance themselves. Similar to many small and medium sized firms, Gabriel has used retain earnings and a rolled-overdraft facility to finance expansion. This is no longer seen as adequate, particularly now that the bank manager is pushing the firm to move to a term loan as its major source of external finance.
You as in recent times hired finance director have been in contact with some financial institutions. The Matey hire acquire company is willing to supply the Rs1 million of additional equipment the firm needs. Gabriel will have to pay for this over 25 months at a rate of Rs.50, 000 per month with no early deposits.
The Helpful leasing company is prepared to buy the equipment and rent it to Gabriel on a finance lease stretching over the four year useful life of the equipment, with a nominal rent thereafter. The cost of this finance is virtually the same to that for the term loan that is 13 per cent annual percentage rate. Required-
Write down a report for board of directors explaining the nature of the four forms of finance which can be used to purchase new equipment- hire purchase, leasing, bank term loan and overdraft point out their relative advantages and disadvantages.
Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.
Issue new stock, then use some of the proceeds to purchase additional inventory and hold the remainder as cash.
Describe concept of future value and present value
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Overview of Financial Management
Pricing objectives and pricing methods in the services sector
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Internal Rate of Return and Net Present Value
Using the financial statements for Kohl's Corporation and J.C. Penney Corporation, respectively, you will calculate and compare the financial ratios
Using the information, prepare a budget for May. Consider that production wil increase to 30,000 jars of salsa, reflecting an anticipated sales increase related to a new marketing campaign.
Company has an opportunity to make an investment with the estimated after tax cash flows
Prepare report on providing a clear audit trail to your company. Prepare a portfolio of analytical reference materials including the financial reports for at least five years. This is your analytical permanent file for the chosen company.
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