Accounting and Financial Management Project Report

Running Head: Accounting and financial management
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Project Report: Accounting and financial management

Accounting and financial management 2
Executive summary
AMP limited is an Australian company which has been taken into the context while
doing the study. In the report, the capital structure level, cost of equity, weighted average cost
of capital, financial position and performance, ratio analysis, material risk associated with the
company etc has been studied in order to identify the financial position and the stock level of
the business.

Accounting and financial management 3
Contents
Part A................................................................................................................................5
Introduction.......................................................................................................................5
Question 1:........................................................................................................................5
Normal Scenario...........................................................................................................5
NPV..........................................................................................................................5
Payback period..........................................................................................................6
Profitability index.....................................................................................................6
Question 2:........................................................................................................................6
Higher sales..................................................................................................................6
NPV..........................................................................................................................7
Question 3:........................................................................................................................7
Lower Sales..................................................................................................................7
NPV..........................................................................................................................8
Findings............................................................................................................................8
Decision process...............................................................................................................9
Recommendation and conclusion.....................................................................................9
Part B................................................................................................................................9
Introduction.......................................................................................................................9
Capital structure................................................................................................................9
Debt and equity level..................................................................................................10
Comparison in the capital structure............................................................................10
Changes in the capital structure..................................................................................11
Cost of equity and total cost of capital...........................................................................12

Accounting and financial management 4
Ratio analysis..................................................................................................................12
Material risk....................................................................................................................13
Conclusion......................................................................................................................14
References.......................................................................................................................15