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

Factors affecting composition of working capital, I need a report on the to...

I need a report on the topic Factors affecting Composition of Working Capital. Can you please assist me?

What is the time value of money, What is the time value of money? The t...

What is the time value of money? The time value of money signifies that money you hold in your hand today is worth more than money you expect to receive in the future. Likewise

Partnership, Par tnership A legally authorized business form in wh...

Par tnership A legally authorized business form in which two or more partners are co-owners, sharing profits, losses, and liabilities related with the business they own.

Opportunity worth today, Assume that you can receive $25,000 per year forev...

Assume that you can receive $25,000 per year forever and that your cost of money is 7%.  What is this opportunity worth today?

Rationale of accounting standards, Rationale of Accounting Standards A...

Rationale of Accounting Standards Accounting Standards are created along with a view to harmonise various accounting policies and practices in use inside a country. The goal o

Multiperiod compounding, where you deposit 1000dollars at the end of each y...

where you deposit 1000dollars at the end of each year for 4 years, what will be the amount of deposits at the end of each year if it is compounded at 12% semi-annually?

What are ratios of chromex plc, Ratios A great number of ratios might b...

Ratios A great number of ratios might be appropriate for this purpose depending on the specific kind of financial performance which is being compared. Amongst those appropriate

Explain the factors which company should apply, Explain the factors which c...

Explain the factors which company should apply Companies to be the very best must Establish what competition is doing Set the very best standards to exceed Es

Public financial statements of a company, Public Financial Statements of a ...

Public Financial Statements of a Company The final exercise is the valuation of a publicly held company's equity. You must base your valuation on the company's public financia

Limitations of the cash flow yield measure, Bond's potential re...

Bond's potential returns are calculated using measures like Yield to Maturity (YTM) and cash flow yield. Both these measures are not free from s

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