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Financial Management Case Study

   

Added on  2020-04-21

14 Pages1716 Words51 Views
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Running head: FINANCEFinanceName of the Student:Name of the University:Authors Note:
Financial Management Case Study_1

1FINANCETable of ContentsQuestion 1:.................................................................................................................................3a. Cash flow of the project:........................................................................................................3b. Calculating NPV of the project:.............................................................................................4c. Depicting viability of the purchase of new ship:....................................................................4Question 2:.................................................................................................................................5a. Commenting the performance of each company in relation to the category analysis:...........5i.Asset management efficiency:................................................................................................5ii. Short term solvency:..............................................................................................................6iii. Financial leverage:................................................................................................................6iv. Profitability:..........................................................................................................................7v. Share market performance:....................................................................................................8b. Depicting whether loan to AA company could be provided by Sydney bank:......................8Question 3:.................................................................................................................................8a. Explaining the source of finance for the company to raise money:.......................................8b. Evaluating the advantages and disadvantages of each investment option:............................9c. Critically evaluating the statement regarding corporate capital:............................................9Question 4:...............................................................................................................................10Identifying and explaining the risk faced by company specific instruments use control therisks:.........................................................................................................................................10Question 5:...............................................................................................................................10Depicting the best strategy for the company to avoid receiving least amount A$ by hedgingthe exchange rate:.....................................................................................................................10Question 6:...............................................................................................................................11Calculating WACC of the company:.......................................................................................11
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2FINANCEQuestion 7:...............................................................................................................................12Depicting whether the stock is overpriced underpriced and correctly priced:.........................12Reference and Bibliography:....................................................................................................13
Financial Management Case Study_3

3FINANCEQuestion 1:a. Cash flow of the project:Year012345Initialinvestment$(40,000,000)Sale of oldmachine$5,000,000 Revenues($)$8,000,000 $8,000,000 $8,000,000 $8,000,000 $8,000,000 Operatingcosts ($)$2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 Other costs($)$500,000 $500,000 $500,000 $500,000 $500,000 depreciation$4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 Salvagevalue$21,000,000 Profit$1,500,000 $1,500,000 $1,500,000 $1,500,000 $22,500,000 Tax$450,000 $450,000 $450,000 $450,000 $6,750,000 PAT$1,050,000 $1,050,000 $1,050,000 $1,050,000 $15,750,000 Cash flow$(35,000,000)$5,050,000 $5,050,000 $5,050,000 $5,050,000 $19,750,000 Discounted cashflow$0.87 $0.76 $0.66 $0.57 $0.50 $4,391,304.35 $3,818,525.52 $3,320,456.97 $2,887,353.89 $9,819,240.52 NPV $ (10,763,118.75)NPV $ (10,763,118.75)
Financial Management Case Study_4

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