Finance and Banking

Running head: FINANCE AND BANKING
Finance and Banking
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Name of the University:
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1BANKING AND FINANCE
Executive Summary
The aim of the assignment is to conduct a financial analysis on the banking industry and
particularly there movement in the five year of trend analysis taken into consideration for
evaluating the project. The first part of the assignment deals with share research of the key
banking stocks like the AMP, CBA and NAB Bank. The impact on the share prices of the
company after the enquiry of Royal Commission of Australia conducted the same. The
second part of the assignment deals with the analysis of the capital budgeting of project. The
analysis was done for Prospects Ltd and the relevant analysis of the company by applying
investment assessment tools such as NPV and IRR for assessing the financial viability of the
project.

2BANKING AND FINANCE
Table of Contents
Introduction................................................................................................................................3
Research.....................................................................................................................................3
AMP, CBA and NAB Share Price.........................................................................................3
Royal Commisssion Enquiry..................................................................................................5
Analysis......................................................................................................................................6
Capital Budgeting...................................................................................................................6
Required Rate of Return and Internal Rate of Return............................................................6
Net Present Value...................................................................................................................6
IRR of Landfill and Borehole................................................................................................7
Cost of Capital........................................................................................................................8
Recommendations......................................................................................................................8
Conclusion..................................................................................................................................9
Reference..................................................................................................................................10

3BANKING AND FINANCE
Introduction
The banking is a crucial industry in the economy and the performance of the banking
company is dependent on major company’s performance. The analysis of the banking stocks
like AMP Bank, Commonwealth Bank and National Australia Bank were evaluated in the
five year trend period and the performance of the companies were assessed for the trend
period (Arthur 2018). The effect of share prices on several crucial events were identified and
the same were assessed to identify whether the same was because of the systematic risk or
because of the unsystematic risk associated with the company (Travlos, Trigeorgis and
Vafeas 2015). The second part of the assignment dealing in the analysis of the two
investment project on behalf of Prospects Ltd was carried for assessing the Landfill and
Boreole project. The key investment assessment tool applied for the evaluation of the project
was the Net Present Value and the Internal Rate of Return. Required rate of return plays a
crucial role in an investment project and the variation in the same will influence the
profitability from the project.
Research
AMP, CBA and NAB Share Price
The share price of the banking stocks like AMP Bank, Commonwealth Bank and
National Australia Bank were evaluated in the five year trend period. The five year trend
period taken into consideration for the evaluation of the share price of the companies was the
period from 2013-2018. The movement of the share price in the trend period was assessed
and the same has been taken into consideration for the graphical analysis (Gay 2016). The
share price of the AMP Bank has grown well in the year 2014-15 but after that we can
observes that the trend for the share price has been falling. The share price of the company
saw an almost 30% decline in October 2018 when the Royal Commission of Australia