Calculate the npv of the decision to undertake the project

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Reference no: EM132368209

Assignment

Part 1 - Financing the Business

Data provided

Your client has approached you about a business the client would like to start. You will be provided with basic information about the clientâ??s proposed business.

Tasks required

Describe and discuss the various sources of finance available to the business, both in the starting up of the business and to finance future expansion.

Explain the advantages and disadvantages of the different sources of finance in different situations.

Make specific recommendations as to which sources of finance would be best for this business, both in the starting up of the business and to finance future expansion.

Part 2 - Preparing the Financial Statements

Data provided

Your clientâ??s business has now been up and running for one year. You will be provided with detailed financial data relating to the value of assets, liabilities and equity, as well as revenue and expenditure over the past year.

Tasks required

Prepare the Balance Sheet, Profit and Loss Statement and Statement of Cash Flows.

Part 3 - Financial Statement Analysis

Data provided

Another 3 years have passed. You will be provided with the firmâ??s most Balance Sheets, Profit and Loss Statemenst and Statements of Cash Flows for the past 3 years.

You will also be provided with the ratios for similar businesses (i.e. industry averages) for each of these ratios.

Tasks required

Calculate each of a set of specified financial ratios for the last three years.

Discuss any trends you have identified and discuss strengths and weaknesses compared to similar businesses.

Give an overall view of the financial health of the firm.

Part 4 (a) - Cost of Capital

Data provided

You will be provided with the firm's most recent Balance Sheet.

Tasks required

Calculate the firmâ??s Cost of Capital.

Part 4 (b) - Project Evaluation

Data provided

You will also be provided with information about a project the firm is planning to undertake.

Tasks required

Forecast future cash flows for the project

Calculate the NPV of the decision to undertake the project (using the firmâ??s cost of capital as the discount rate)

Make a recommendation as to whether or not the firm should undertake the project.

Reference no: EM132368209

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Reviews

len2368209

9/9/2019 4:40:22 AM

Recommendation of the most appropriate sources of finance for this business in the start-up phase . This should take into account the size and nature of this business, explain why these sources are appropriate and discuss reasons why other sources would not be appropriate. Discussion of appropriate source of finance for future expansion of this business. This should take into account the size and nature of this business, explain why these sources are appropriate and discuss reasons why other sources would not be appropriate.

len2368209

9/9/2019 4:39:45 AM

The data for each of the 4 parts of the Assignment will be provided via an Excel file. You will need to be able to download and open this Excel file, and you submit your answers via the Excel file. Some students may find that the file does not display properly on an Apple device. If this is the case, it may be that you will need to view the data and complete the assignment on a PC, such as one in the library, in order to view the data to complete each part of the assignment. Please email the subject coordinator if this happens so that hopefully the problem can be minimised.

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