Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
BURLEY PLC
Financial desirability
In a real-terms analysis the real rate of return necessary by shareholders has to be used. This is found as follows
1 nominal rate/1 inflation rate-1 = (1.14/1.055) -1 = 8%
The applicable operating costs per box after removing the allocated overhead are (8.00 + 2.00 + 1.50 + 2.00) = $13.50. The costs of the preliminary research etc are not relevant as they are sunk. The set-up cost has previously been adjusted for tax reliefs but the annual cash flows will be taxed at 33%.
The NPV of the project is given by
NPV($) = [PV of after-tax cash inflows] - [set-up costs]
= 0.15m [20 - 13.50] (1 - 33%) PVIFA8.5 - 2m
= 0.65m (3.993) - 2m
= + 2.6m - 2m
= + 0.6m i.e., + $0.6m
Therefore the project is attractive according to the NPV criterion.
The IRR is merely the discount rate R which generates a zero NPV that is the solution to the expression
NPV = 0 = 0.65m (PVIFAR,5) - 2m
Hence PVIFAR.5 = 2m/0.65 = 3.077
To the nearest 1% IRR = 19%. Ever since this exceeds the required return of 8% in real terms the project is acceptable.
The management of Nelson plc wish to estimate their firm’s equity beta. Nelson has had a stock market quotation for only two months and the financial management feels that it would
There are two important term structure theories related to the shapes of the yield curve. First is the Expectations Theory and the second is Market Segmentations
Q. Working Capital Based on Operating Cycle? The concept of operating cycle, helps determining The time scale over which the current assets are maintained. The operating cycle
a) Describe five factors that should be taken into account by a businessman in making the choice between financing by short-term and long-term sources.
a choice is to be made between the two completing proposal which require an equal investment of Rs.50000.00 and we are expected t gererate net cash flow as under. Year Project A
Calculation of before-tax return on capital employed Total net before-tax cash flow = 122 + 143 + 187 + 78 = $530000 Total depreciation = 250000 - 5000 = $245000 Average
Define and discuss indirect world systematic risk. The indirect world systematic risk can be illustrated as the covariance among a nontradable asset and the world market portfo
CAPITALISATION RATE=0.01 EARNINGS PER SHARE(E)=10 ASSUME RATE OF RETURNS ON INVESTMENTS (R):15
Going Concern in Financial Management Going concern means in which business activities will continue for a fairly long period of time unless and until the business has entered
applicability of an operating cycle in vegetable growing business
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd