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

Profitability index (pi), Profitability Index (PI) : It is a ratio of t...

Profitability Index (PI) : It is a ratio of the present value of the total cash benefits to the present value of the net cash outlay.  The higher the PI, the higher the return.

Financial Management, BigGardens Ltd (BigGardens) is a private company that...

BigGardens Ltd (BigGardens) is a private company that owns and operates a chain of garden centres in the Bristol area. The company has expanded rapidly over recent years, opening

How the export promotion trade strategy, Question 1: (i) How are educa...

Question 1: (i) How are education and economic growth connected? (ii) Explain how the export promotion trade strategy may be more growth promoting for developing economies,

Procedure of measurement of future value, Procedure of measurement of Futur...

Procedure of measurement of Future Value If we are getting a return of 10 % in one year then what is the return we are going to get in two years? 20 %, right. What about return

Contingency planning, Contingency Planning:   Once the events are eval...

Contingency Planning:   Once the events are evaluated and categorised, and the levels of risk attaching to them have established.  The organisation should then commence pla

Duration and convexity of mortgage backed security, Duration an...

Duration and Convexity of MBS A graph decpicting the price of the security under study and the interest rates helps in assessing the duratio

Leverage, Evaluate the importance of leverage of financial management on a ...

Evaluate the importance of leverage of financial management on a small scale company.

Finance, Ask questiSuggestion regarding Credit limit. Should it be approved...

Ask questiSuggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

Integration of economic, a) Globalisation refers to the interdependence and...

a) Globalisation refers to the interdependence and integration of economic, social and politic issues (services, goods, people and capital), across the world. For example, consumer

Pre-requisites for effective budgetary control system, ORGANISATION FOR BUD...

ORGANISATION FOR BUDGETARY CONTROL (or) PRE-REQUISITES FOR THE INTRODUCTION OF AN EFFECTIVE BUDGETARY CONTROL SYSTEM 1.   BUDGET CENTRE:  It is a section of the organization

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