Studentshare
Subjects
Miscellaneous
Financial Analysis for Managers Research Paper

Financial Analysis for Managers - Research Paper Example

Add to wishlist

Summary

Question 16. IRR. Marielle Machinery works forecasts the following cash flows on a project under consideration. It uses the internal rate of return rule to accept or reject projects. Should this project be accepted if the required return is 12 percent
Now because the net present value is giving a positive figure Marielle Machinery works should go for this project…

Download full paper File format: .doc, available for editing

GRAB THE BEST PAPER94.9% of users find it useful

Financial Analysis for Managers Research Paper

Read Text Preview

Subject: Miscellaneous
Type: Research Paper
Level: High School
Pages: 7 (1750 words)
Downloads: 2
Author: maurine74

Extract of sample "Financial Analysis for Managers"

Download file to see previous pages

c. Which project is most attractive to a firm that can raise an unlimited amount of funds to pay for its investment projects Which project is most attractive to a firm that is limited in the funds it can raise c) Project B would be the choice for a firm with no hassle in arranging funds. The reason being that though the project has a lower Profitability index and even a lower NPV but its consistent cash flows could be attractive for big investors. Such investors are called Mutually Exclusive.

How ever when the funds are limited, then Project A would be the choice as the Profitability Index and NPV are both favorable and this shows the best method to use the funds efficiently. Kinky Copies may buy a high-volume copier. The machine costs $100,000 and will be depreciated straight-line over 5 years to a salvage value of $20,000. Kinky anticipates that the machine actually can be sold in 5 years for $30,000. The machine will save $20,000 a year in labor costs but will require an increase in working capital, mainly paper supplies, of $10,000.

The firm's marginal tax rate is 35 percent, and the discount rate is 8 percent. Should kinky buy the machine . = $ 12.17Thus from the calculations it is evident that Project A has a higher NPV.b) Profitability Index Formula = Present value of the cash flows/ initial investment.Profitability Index for Project A = (18.182 + 16.528 + 15.026)/36 = 1.38Profitability Index for Project B = (22.7275 + 20.66 + 18.7825)/50 = 1.24Hence the Profitability Index for Project A is higher.c) Project B would be the choice for a firm with no hassle in arranging funds.

The reason being that though the project has a lower Profitability index and even a lower NPV but its consistent cash flows could be attractive for big investors. Such investors are called Mutually Exclusive. How ever when the funds are limited, then Project A would be the choice as the Profitability Index and NPV are both favorable and this shows the best method to use the funds efficiently.Q.23. Project Evaluation. Kinky Copies may buy a high-volume copier. The machine costs $100,000 and will be depreciated straight-line over 5 years to a salvage value of $20,000.

Kinky anticipates that the machine actually can be sold in 5 years for $30,000. The machine will save $20,000 a year in labor costs but will require an increase in working capital, mainly paper supplies, of $10,000. The firm's marginal tax rate is 35 percent, and the discount rate is 8 percent. Should kinky buy the machineAns. 23 In this Project evaluation, we will go step by step to analyze the acceptance of this machine by the firm.First we will take in consideration all the costs of this project.1) The Depreciation cost.

Depreciation (Straight Line) formula = Total cost - salvage value/number of years to be used.Depreciation for the copier = 100,000 - 20,000/5 = 16,000Thus the total

...Download file to see next pages Read More

CHECK THESE SAMPLES OF Financial Analysis for Managers Research Paper

The World of Management

The managers of the operations department need to manage the resources available for them, for instance, labor and raw materials, and increase the profit of the company.... Marketing managers have to make sure that the company is providing goods and services as per the customer requirement and the accounts department managers have to make sure that there is nothing false in the revelation of the financial information, which are used by the stakeholders of the company....

7 Pages (1750 words) Research Paper

The Impact of the Internet on Business Organisations

The paper will mainly answer this research question using data collected from questionnaires that were distributed to a target population of fifteen people that comprised of five managers and ten friends and relatives.... The paper "The Impact of the Internet on Business Organisations" discusses that the Internet has provided benefit to the consumers and business organisations....

11 Pages (2750 words) Research Paper

Corporate Culture: How to Motivate Employees

It is unique from… managers must find a way to promote a corporate culture where every employee performs effectively.... In management, this is more termed as ‘carrot and stick' style where managers would need to constantly police workers to ‘motivate' them to work.... Motivation does not come by financial compensation alone but also in the feelings of competence when a work is successfully accomplished....

7 Pages (1750 words) Research Paper

Introduction, Analysis, Recommendations and Draft of Paper

This paper will… The managers nurture these behaviors and sometimes the employees hit the international stages.... These are managers, behavioral experts and the employees themselves.... The stakeholder meeting involving firm managers from growing firms in Italy, drawing from Government (2012),...

8 Pages (2000 words) Research Paper

How a Business Admin can lead you into a successful leadership role in financial management

This includes: finance officers, credit managers, cash managers, risk managers, and insurance managers.... The future of financial managers is very bright as per the data indicated in the However, there are certain requirements that one need to fulfill before becoming a financial manager.... As previously stated there are very many roles of financial managers.... The managers are also supervisors of employees who handle budgeting and financial reporting issues in an organization....

5 Pages (1250 words) Research Paper

Has the Global Financial Crisis Led to Fundamental Change in the Relationship between Government and Business

This crisis has brought people on their toes for keeping a close eye on how fund managers and investment firms manage their hard-earned earnings.... In line with the same, people began to lose their trust amongst the fund managers – let them be banks, brokers, investment firms, funds, or business venture capitalists.... "Has the Global financial Crisis Led to Fundamental Change in the Relationship between Government and Business" paper states that a significant impact on this relationship as a result of the global financial melt-down but this presence of proof adds to the research the authenticity....

6 Pages (1500 words) Research Paper

Line Managers and the Implementation of Diversity at Organizations

The analysis would reveal that where the Human resource managers along with the top management of organizations try their best to implement diversity management, line managers remain the biggest hurdle in their way.... hellip; For understanding the importance of the role that line managers play in the implementation of diversity management at organizations, it is imperative here to understand first the reasons for the emergence of diversity in the workforce of today....

10 Pages (2500 words) Research Paper

Service Quality in Tourist Accommodation Organizations

hellip; According to the research findings, it can, therefore, be said that managers in service organizations are responsible for ensuring reasonable consistency and high levels of quality in service interactions.... managers often have to contend with priorities pulling in different directions, for instance in the tradeoff between service quality and service productivity.... managers in these organizations are therefore required to focus more on qualitative or soft aspects that can help them to initiate culture change and consequent improvements in the customer-service provider interaction process....

6 Pages (1500 words) Research Paper