Analyse the company capital structure, Financial Management

Assignment Help:

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


Related Discussions:- Analyse the company capital structure

Calculate the net present value of cash flows, Assume a firm has the follow...

Assume a firm has the following cash flows for the next five years: $50,000, $100,000, $150,000, $200,000, and $300,000. We start this business with an initial investment of $250,0

What do you meant by negative externalities, Question 1: i) Is ther...

Question 1: i) Is there a stable and inverse link between unemployment and inflation? ii) The government announces that expansionary policies will be enacted in a view

Securities and exchange commission (sec), SEC is the Regulatory body for...

SEC is the Regulatory body for investor protection in the United States which is created through the Securities Exchange Act of 1934.

Convexity, Duration is good measure while estimating the percentage p...

Duration is good measure while estimating the percentage price change for a small change in interest rates but the estimation becomes inferior with the larger cha

Define primary advantage to a corporation of investing, What is the primary...

What is the primary advantage to a corporation of investing some of its funds in working capital? By investing in working capital a firm acquires the liquidity it requirements he

Role of special purpose vehicle, The financial institutions tha...

The financial institutions that originate the loans sell a pool of cashflow-producing assets to a specially created third party that is called a

91-day t-bills, 91-Day T-Bills Starting from July, 1965, 91-day T-bills...

91-Day T-Bills Starting from July, 1965, 91-day T-bills were issued at a discount rate ranging from 2.5-4.6 percent per annum. Till July, 1974, the discount rate was 4.6 percen

Out of cash, Out of Cash Calculated by taking organization cash on hand...

Out of Cash Calculated by taking organization cash on hand divided by its burn rate, yielding the time period that the organization will have enough cash to cover what it wants

None, Reacher Technology has consulted with investment bankers and determin...

Reacher Technology has consulted with investment bankers and determined the intere Reacher Technology has consulted with investment bankers and determined the interest rate it woul

Cost of preference share capital, I need assistance on Cost of preference s...

I need assistance on Cost of preference share capital in financial management? Can someone help me to solve this proble with example It's Urgent!!!!!!!

Write Your Message!

Captcha
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