Calculate the Inventory Turnover and Trade Payables

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Reference no: EM132294400

Financial Management for Decision Making Assignment -

Case Study - Lou Lublin Books operates a chain of bookstores across the UK.

Please note this is a fictional case study.

REQUIRED:

(a) Calculate Inventory Turnover, Trade Payables and Trade Receivables for both years.

(b) Comment on the results you have calculated in a) above, making particular reference to any suggestions for areas of improvement you can think of and any specific advise on methods for improving the efficiency of the company's working capital management.

(c) Prepare a schedule of cash flows for the project. Calculate, using the information available, the Net Present Value of the proposal to sell the bundles of e-readers and run the e-book store. Include in your answer a justification for whether or not you recommend Lou Lublin Books to go ahead with this proposal. You should assume the relevant cost of capital is 13%.

(d) Calculate the payback period for the proposed project to sell e-books, if the company has a policy of only accepting projects with payback of less than 3 years, would this be accepted? Comment on the suitability of the payback method compared to the NPV method of appraising projects.

(e) Discuss the choice of financing for the project to bundle the e-readers and subscriptions. You should reference the general advantages and disadvantages of the main financing choices as well as relating your answer to the specific circumstances of Lou Lublin Books and Robert Briggs.

Attachment:- Case.rar

Reference no: EM132294400

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