Assignment - Fundamentals of Finance

Running head: FUNDAMENTALS OF FINANCE
Fundamentals of Finance
Name of the Student:
Name of the University:
Author’s Note:

FUNDAMENTALS OF FINANCE1
Table of Contents
Investment Project Analysis............................................................................................................2
Bibliography....................................................................................................................................5

FUNDAMENTALS OF FINANCE2
Investment Project Analysis
The cash flow analysis has been done for the Maryland Home and Community-Based
Services (MHCBS), that is considering the expansion of the different clientele for the current
organization. In order to well analyze the effectiveness of the undertaken project a cash flow
analysis would be done whereby we would be recording down the major cash inflows and
outflows that would be seen over a five year course period. The cash flow analysis was done
considering the monthly membership staff in the first years to be around $125 which is expected
to remain the same over the five year period. On the other hand, the increase in the monthly cost
would be seen at a rate of 5% for the company. In order to well conceptualize the monthly costs
into annual basis the same has been annualized by multiplying the monthly cost with a sum of
twelve (Lee et al., 2018). Variable costs on the other hand would be dependent on the total
number of memberships that are taken by individuals and the rise or decrease in the same would
be dependent on the count heads of individuals. Now after considering all the cash inflows and
cash outflows the initial setoff investment that has been well considered for the project has been
around $317,880. Now in order to well effectively accept the project there were two set of key
criteria that were placed by the Board of Directors and these were as follows:
 The payback of the project should be less than or equal to a time period of five-years or
the project life.
 The Breakeven Units of Members on a monthly basis should be well achieved.
The Payback period for the project has been around 4.63 years which well states the project
would be well returning the initial set of investment within a time frame of 4.63 years.