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Financial Management Assignment PDF

   

Added on  2021-12-22

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Financial Management
1
Financial Management Assignment PDF_1

Case part I
Requirement-1
Initial outlay
Production equipment cost 500000
Installation cost 22000
522000
Working capital
Increase raw material
inventories 218000
Increase accounts payable 165000
Increase accounts receivable -39000
344000
Total 866000
Operating Cash Flows
1 2 3 4 5 6
Revenues
875,000.0
0
875,000.
00
875,000.
00
875,000.
00
875,000.
00
875,000.
00
Annual production
Costs
(640,000.0
0)
(640,000.
00)
(640,000.
00)
(640,000.
00)
(640,000.
00)
(640,000.
00)
Depreciation
(87,000.00
)
(87,000.0
0)
(87,000.0
0)
(87,000.0
0)
(87,000.0
0)
(87,000.0
0)
Profit before tax
148,000.0
0
148,000.
00
148,000.
00
148,000.
00
148,000.
00
148,000.
00
Tax @34% 50,320.00
50,320.0
0
50,320.0
0
50,320.0
0
50,320.0
0
50,320.0
0
Profit after tax 97,680.00
97,680.0
0
97,680.0
0
97,680.0
0
97,680.0
0
97,680.0
0
Add: Depreciation 87,000.00
87,000.0
0
87,000.0
0
87,000.0
0
87,000.0
0
87,000.0
0
operating Cash flows 97,680.00
97,680.0
0
97,680.0
0
97,680.0
0
97,680.0
0
97,680.0
0
Working capital
344,000.
2
Financial Management Assignment PDF_2

00
Salvage value net of
tax (note-1)
68,904.0
0
Net cash flows 97,680.00
97,680.0
0
97,680.0
0
97,680.0
0
97,680.0
0
510,584.
00
Requirement-2
Payback period
0 1 2 3 4 5 6
Cash flows
(866,000.
00) 97,680.00
97,680.
00
97,680.
00
97,680.
00
97,680.
00
510,584.0
0
Cumulative
cash flows
(768,320.00
)
(670,64
0.00)
(572,96
0.00)
(475,28
0.00)
(377,60
0.00)
132,984.0
0
Payback
period 5.74 Years
Discounted Payback period
0 1 2 3 4 5 6
Discounted
Cash flows
(866,000.
00) 85,684.21
75,161.
59
65,931.
22
57,834.
40
50,731.
93
232,615.2
0
Cumulative
cash flows
(780,315.79
)
(705,15
4.20)
(639,22
2.98)
(581,38
8.58)
(530,65
6.65)
(298,041.
45)
Payback
period 6.00
More than
6 Years
Requirement 3
NPV of the project
0 1 2 3 4 5 6
Cash
flows
(866,000.0
0)
97,680.0
0
97,680.0
0
97,680.0
0
97,680.0
0
97,680.0
0 510,584.00
PAF
@14% 1.00 0.8772 0.7695 0.6750 0.5921 0.5194 0.4556
Present
value (866,000.0 85,684.2 75,161.5 65,931.2 57,834.4 50,731.9 232,615.20
3
Financial Management Assignment PDF_3

0) 1 9 2 0 3
NPV
(298,041.4
5)
NPV profile for integer
rates between 2% and
30%
Discount
rate NPV
2% 47,794.70
3% 8,951.86
4% (27,624.04)
5% (62,091.08)
6% (94,594.73)
7% (125,269.04)
8% (154,237.55)
9% (181,614.31)
10% (207,504.59)
11% (232,005.72)
12% (255,207.72)
13% (277,193.90)
14% (298,041.45)
15% (317,821.94)
16% (336,601.75)
17% (354,442.52)
18% (371,401.52)
19%
4
Financial Management Assignment PDF_4

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