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Accounting and Finance Assignment

   

Added on  2020-03-23

10 Pages1416 Words45 Views
Running head: ACCOUNTING & FINANCEAccounting & FinanceName of the Student:Name of the University:Author’s Note:

1ACCOUNTING & FINANCETable of ContentsAnswer to Part A:............................................................................................................................2Requirement 1:.............................................................................................................................2Requirement 2:.............................................................................................................................4Requirement 3:.............................................................................................................................4Answer to PART B:.........................................................................................................................5Introduction:................................................................................................................................5Analysis of APN’s capital structure:...........................................................................................5Computation of After-Tax WACC:.............................................................................................6Analysis of financial ratio of APN:.............................................................................................6APN outdoor group and its competitor performance:.................................................................6Capital structure of APN Outdoor group:....................................................................................7Conclusion:..................................................................................................................................8References:......................................................................................................................................9

2ACCOUNTING & FINANCEAnswer to Part A:Requirement 1:Particulars012345678Initial Investment($1,650,000)Annual Cash Flow:Incremental Revene$1,445,000$1,589,500$1,748,450$1,923,295$2,115,625$2,327,187$2,559,906$2,815,896Staff Cost($900,000)($954,000)($1,011,240)($1,071,914)($1,136,229)($1,204,403)($1,276,667)($1,353,267)Material Costs($210,000)($222,600)($235,956)($250,113)($265,120)($281,027)($297,889)($315,762)Marketing Costs($46,000)($48,760)($51,686)($54,787)($58,074)($61,558)($65,252)($69,167)Other Costs($25,000)($26,500)($28,090)($29,775)($31,562)($33,456)($35,463)($37,591)Depreciation of Lab($206,250)($206,250)($206,250)($206,250)($206,250)($206,250)($206,250)($206,250)Net Profit before Tax$57,750$131,390$215,228$310,455$418,389$540,493$678,385$833,859Less: Tax on Profit($17,325)($39,417)($64,569)($93,137)($125,517)($162,148)($203,515)($250,158)Net Profit after Tax$40,425$91,973$150,660$217,319$292,872$378,345$474,869$583,701Add: Depreciation$206,250$206,250$206,250$206,250$206,250$206,250$206,250$206,250Annual After-Tax Cash Flow$246,675$298,223$356,910$423,569$499,122$584,595$681,119$789,951Salvage Value$100,000Net Annual Cash Flow($1,650,000)$246,675$298,223$356,910$423,569$499,122$584,595$681,119$889,951Cumulative Cash Flow($1,650,000)($1,403,325)($1,105,102)($748,192)($324,624)$174,499$759,094$1,440,213$2,330,164Payback PeriodRequired Rate of Return16%16%16%16%16%16%16%16%16%Discounted Cash Flow($1,650,000)$212,651$221,628$228,657$233,933$237,639$239,942$241,000$271,458Cumulative Discounted Cash Flow($1,650,000)($1,437,349)($1,215,721)($987,064)($753,131)($515,492)($275,550)($34,549)$236,908Discounted Payback periodNet Present ValueProfitability Index4.657.13$236,908114.36%PeriodCapital Budgeting for Base-Case:

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