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Financial Management and Financial Accounting Study Material

   

Added on  2023-06-18

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Financial Accounting
Financial Management and Financial Accounting Study Material_1

Table of Contents
Question 1..............................................................................................................................3
Question 2..............................................................................................................................4
Question 3..............................................................................................................................6
Question 4..............................................................................................................................6
REFERENCES...........................................................................................................................8
Financial Management and Financial Accounting Study Material_2

Question 1
a)
i)
Year
Deman
d Price Sales
Fixed
cost
Variable
cost
each
unit
Variable
cost
Cash
inflows
1 55000 30 1650000 150000 10 550000 950000
2 50000 30.6 1530000 150000 10.2 510000 870000
3 90000 31.212 2809080 150000 10.404 936360
172272
0
4 10000
31.8362
4
318362.
4 150000
10.6120
8
106120.
8 62241.6
NPV
Year
Cash
inflows
cost of
capita
l @
10%
Discounte
d cash
inflows
1 950000 0.909 863636
2 870000 0.826 719008
3
172272
0 0.751 1294305
4
62241.
6 0.683 42512
Total discounted
cash inflow 2919462
Initial investment 2800000
NPV (Total
discounted cash
inflows - initial
investment) 119462
ii)
IRR
Year
Cash
inflows
0
-
2800000
Financial Management and Financial Accounting Study Material_3

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