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Frontiers in Ecology and the Environment - PDF

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Added on  2021-06-14

Frontiers in Ecology and the Environment - PDF

   Added on 2021-06-14

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Running head: BUSINESS FINANCEBusiness financeName of the studentName of the universityStudent IDAuthor note
Frontiers in Ecology and the Environment - PDF_1
1BUSINESS FINANCETable of ContentsAnswer 1....................................................................................................................................2Answer 2....................................................................................................................................2Answer 3....................................................................................................................................2Answer 4....................................................................................................................................2Answer 5....................................................................................................................................2Answer 6....................................................................................................................................4Answer 7....................................................................................................................................6Answer 8....................................................................................................................................6Reference....................................................................................................................................7
Frontiers in Ecology and the Environment - PDF_2
2BUSINESS FINANCEAnswer 1Non-discounted payback periodIt is the capital budgeting method that does not consider the time value of moneyexplicitly. The non-discounted payback period not only ignores the time value of money, italso ignores the cash receivable after the payback period (Gallo 2014). The non-discountedpayback period of the project for new SSHA is 2.21 years. Answer 2 Profitability index of projectIt is the index that recognizes the relationship among the benefits and costs of theproposed project. The profitability index of the project for new SSHA is 1.72Answer 3IRR of the projectIt is the interest rate at which the NPV of cash flows from the investment or project isequal to zero. It is used for evaluating the investment or project’s attractiveness. The IRR ofthe project for new SSHA is 20.75%Answer 4NPV or net present value of the project is the difference among the present value ofcash inflows and cash outflows over the particular period of time. It is used for capitalbudgeting to analyze profitability of the project or projected investment. the NPV of theproject for new SSHA is $ 32,544,049.64 (McAuliffe 2015). Answer 5While evaluating the investment project generally the cash flows are forecasted and itdepends on expected costs and revenues. Expected revenue is the function of sales price perunit and sales volume. In the same way the sales volume depends on the company’s marketshare and market size. Cost includes the variable costs that is depended on the sales volumeand variable cost per unit the fixed cost (Iooss and Lemaître 2015). The NPV of the project is
Frontiers in Ecology and the Environment - PDF_3

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