BFA107 FINANCIAL MANAGEMENT- Assignment Problem

Assignment Help Financial Management

Reference no: EM132403434

BFA107 FINANCIAL MANAGEMENT, University of Tasmania, Australia

Assessment : Written assignment

Description:

Your assignment involves preparing a written report where you will present an analysis of financial information relating to a capital investment project described in the attached case study and provide recommendations that will assist the firm in its decision making.

Your tasks:

Based on the information in the case study, Catherine has asked you to write a report to HFC’s management advising them as to the best course of action regarding this project. Your report should address the following specific questions asked by HFC’s management:

1. Discuss which costs are relevant for the evaluation of this project and which costs are not. Your discussion should be justified by a valid argument and supported by references to appropriate sources

2. Determine the initial investment cash flow.

3. Estimate all operating cash flows associated with the project over 5 years.

4. Calculate the project’s payback period. Assuming the business could be sold at the end of the five years for $1 million. Briefly comment on your results

5. Calculate the Net present value (NPV) of the project, assuming that the initial investment could be sold at the end of the five years for $1 million. Briefly comment on your results and make appropriate remarks on the assumptions made for these calculations if necessary.

6. Estimate the Internal rate of return (IRR) of the project. Briefly comment on your results

7. Using sensitivity analysis, recalculate NPV using the scenario of

a. A decrease in project sales by 10% annually.

b. An increase of the sale price by 5% annually

c. An increase of material costs change from 3.5% to 8%

Briefly comment on your results.

8. In view of your answer to Point 4 to point 7 above, advise HFC’s management as to whether they should go ahead with the investment project. In your recommendations, you may wish to suggest possible refinements in the method used for evaluating this project.

Reference no: EM132403434

Questions Cloud

Defenses they can assert in negligence cases : Explain why someone might think this statement is true: Manufacturers benefit from the many defenses they can assert in negligence cases?

Explain why someone might think this statement is true : Explain why someone might think this statement is true: A plaintiff in a tort case would prefer to receive compensatory and punitive damages over nominal damage

Identify a contact person for quality improvement program : Identify a contact person for the quality improvement program at a long-term care facility in your geographic area. Conduct a brief in-person, telephone.

How poverty effects the so called basic human rights : After watching the film Poverty in America assigned in Lesson Thirteen, discuss if you think unacknowledged privilege, social apathy and lack of empathy.

BFA107 FINANCIAL MANAGEMENT- Assignment Problem : BFA107 FINANCIAL MANAGEMENT Assignment Help and Solutions, University of Tasmania, Australia-Estimate all operating cash flows associated with the project.

Summarize the pertinent details of the case : From the first e-Activity, evaluate the overall importance of the National Labor Relations Board. Next, summarize the pertinent details of the case.

Critically Analyse a Case Study Inside Amazon : You are required to critically analyse a case study "Inside Amazon Case study" Actions, and write a business report

Discuss your overall understanding of fmla : Discuss your overall understanding of FMLA and the pregnancy discrimination act as it relates to organizations granting leave for each.

What are cultural frameworks for defining business ethics : What are the cultural frameworks for defining business ethics within organizations? How should organizations undertake a cultural change? What cultural systems.

User Account

All Pages