Manage Finance: Rates for Investment and Financial Requirements

This article discusses rates for investment and financial requirements for managing finance in a new business opportunity of professional printing. It includes a startup cost statement, cash budget, profit or loss summary, discounted cash flow, and negotiation undertaken with relevant groups and individuals. The subject is finance and the course code and college/university are not mentioned.

Running head: MANAGE FINANCE
Manage Finance
Name of the Student:
Name of the university:
Authors Note:

1MANAGE FINANCE
Table of Contents
Part A...............................................................................................................................................2
Rates for investment in respect of the capital expenditure proposals:.........................................3
Part B:..............................................................................................................................................7
Part C:..............................................................................................................................................8
Reference.......................................................................................................................................10

2MANAGE FINANCE
Part A
New business opportunity: “Professional printing”
Introduction
It has been found that in the recent times the requirement of some good quality and professional
printing is required for the purpose of carrying out the daily business activities and establishing
decent communication with the stakeholders of the business. Hence the new opportunity in this
respect can be capitalized profitably by the company.
Strategic opportunity in terms of tactical and operational objectives:
The strategic opportunity that has been presented before the business is that there are very
few entities that are conducting the business in this respect and hence it provides the company
with an added advantage that it can gain higher market share in a very short period of time.
Proper work programs will have to be developed in this respect like the steps or the
process that is going to be established within the entity to carry out the activities of the entity.
Like at first the detailed request from the client will be accepted, then according to that the soft
copy of the same will be prepared and a provisional copy will be sent to the customer for his
approval. After the approval of the customer has been received the order will be printed
(Chwieroth, 2015).
Setting up of the business objectives, the trend analysis and the time frames within the
objectives have to be achieved and the way they are going to be achieved:

3MANAGE FINANCE
The business objective of “Professional Printing” would be to provide quality printed
material to the customer at the most reasonable prices possible. For ensuring that the entity
survives in the long run the trend analysis of the financial performance and the position of the
entity are very crucial (Zhao & Huchzermeier 2018). Hence if the trends are showing negative
returns corrective steps will have to be taken in that respect after the identification of the reasons
for the down fall in the performance and position of the company. The time frame of the
performance that is to be achieved by the entity will be fixed as quarterly.
Consultation with the relevant groups/ individual for preparation of the proposal and the
steps that are going to be taken up by it for achieving the same:
The relevant group’s with whom the discussion in this matter should be carried out are
the computer experts and the owners of the shops selling the colour and the paper required for
the purpose of ensuring that the costs that is going to incur in this respect is continuously kept
under monitoring.
For ensuring, that the costs are being kept under the control, effort will be made to
procure the raw material that is the paper, and the ink is done as peg rut economic order quantity
basis. The reason for this is that it will help in maintaining the balance between the stock out cost
and the inventory costs of the entity.
Rates for investment in respect of the capital expenditure proposals:
For the purpose of ensuring that the company doesn’t incur heavy losses in respect of the
investment that is done by it on its capital expenditure the returns that are going to be generated
by the use of it must be greater than the weighted average cost of capital of the firm. If the
returns are less than that the company is going to incur losses.

4MANAGE FINANCE
Financial Requirements
Startup cost
Statement Showing Startup cost
Start-up Expenses Amount ($) Amount ($)
Legal 2000.00
Stationery, etc. 800.00
Boucher 1250.00
Telephone 850.00
Consultants 4000.00
Insurance 1500.00
Rent 800.00
items expenses 5500.00
Advertisements 4500.00
Equipment expenses 3000.00
Other 1500.00
Total Start-up Expense 25700.00
Start-up Assets Needed
Cash balance 15000.00
Inventory items 1500.00
Other current assets 500.00
Long term assets 7000.00
Total Start up Assets Required 24000.00
Total Initial Financing Required (Startup Cost) 49700.00
Startup Funding plan
Start-up Funding Plan
Source of Finance Amount ($)
Capital 37275.00

5MANAGE FINANCE
Bank Loans 12425.00
Total Investment 49700.00
Cash Budget
Cash Flow Statement (All amounts in $)
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Receipts
Collection 115000 126500 139150 153065 168372
Total Receipt 115000 126500 139150 153065 168372
Payments
Assets purchased 24000.00
Variable expenses 16700 18370 20207 22228 24450
Fixed Expenses 7800 8580 9438 10382 11420
Total Payments 48500 26950 29645 32610 35870
Net cash generated 66500 99550 109505 120456 132501
Opening balance 49700 116200 215750 325255 445711
Closing 116200 215750 325255 445711 578212
Profit or loss summary for 12 months
Profit or loss statement
Particula
rs
Jan
uar
y
Feb
rua
ry
Marc
h
Apr
il May
Jun
e July
Aug
ust
Sept
emb
er
Oct
obe
r
Nov
emb
er
Dec
emb
er
Income
from
Services
$9,5
83.3
3
$9,5
83.3
3
$9,58
3.33
$9,5
83.3
3
$9,5
83.3
3
$9,5
83.3
3
$9,5
83.3
3
$9,5
83.3
3
$9,5
83.3
3
$9,5
83.3
3
$9,5
83.3
3
$9,5
83.3
3
Less:
Variable
Cost
Legal
$16
6.67
$16
6.67
$166.
67
$16
6.67
$166
.67
$16
6.67
$16
6.67
$16
6.67
$166
.67
$16
6.67
$16
6.67
$16
6.67
Stationer
y, etc.
$66.
67
$66.
67
$66.6
7
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
Boucher
$10
4.17
$10
4.17
$104.
17
$10
4.17
$104
.17
$10
4.17
$10
4.17
$10
4.17
$104
.17
$10
4.17
$10
4.17
$10
4.17

6MANAGE FINANCE
Telephon
e
$70.
83
$70.
83
$70.8
3
$70.
83
$70.
83
$70.
83
$70.
83
$70.
83
$70.
83
$70.
83
$70.
83
$70.
83
Consulta
nts
$33
3.33
$33
3.33
$333.
33
$33
3.33
$333
.33
$33
3.33
$33
3.33
$33
3.33
$333
.33
$33
3.33
$33
3.33
$33
3.33
Advertise
ments
$12
5.00
$12
5.00
$125.
00
$12
5.00
$125
.00
$12
5.00
$12
5.00
$12
5.00
$125
.00
$12
5.00
$12
5.00
$12
5.00
Equipme
nt
expenses
$66.
67
$66.
67
$66.6
7
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
Other
$45
8.33
$45
8.33
458.3
3333
33
458.
333
33
458.
3333
33
458.
333
3
458.
333
33
458.
333
3
458.
3333
3
458.
333
33
458.
333
33
458.
333
33
Contribut
ion
$8,1
91.6
7
$8,1
91.6
7
$8,19
1.67
$8,1
91.6
7
$8,1
91.6
7
$8,1
91.6
7
$8,1
91.6
7
$8,1
91.6
7
$8,1
91.6
7
$8,1
91.6
7
$8,1
91.6
7
$8,1
91.6
7
Less:
Fixed
Costs
Insurance
$12
5.00
$12
5.00
$125.
00
$12
5.00
$125
.00
$12
5.00
$12
5.00
$12
5.00
$125
.00
$12
5.00
$12
5.00
$12
5.00
Rent
$66.
67
$66.
67
$66.6
7
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
$66.
67
items
expenses
$45
8.33
$45
8.33
$458.
33
$45
8.33
$458
.33
$45
8.33
$45
8.33
$45
8.33
$458
.33
$45
8.33
$45
8.33
$45
8.33
Net
Profit
$7,5
41.6
7
$7,5
41.6
7
$7,54
1.67
$7,5
41.6
7
$7,5
41.6
7
$7,5
41.6
7
$7,5
41.6
7
$7,5
41.6
7
$7,5
41.6
7
$7,5
41.6
7
$7,5
41.6
7
$7,5
41.6
7
Discounted cash flow
Calculation of Discounted cash flow
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Receipts
Collection $115,000.00 $126,500.00 $139,150.00 $153,065.00 $168,371.50
Total Receipt $115,000.00 $126,500.00 $139,150.00 $153,065.00 $168,371.50
Payments $0.00 $0.00 $0.00 $0.00 $0.00
Assets purchased $24,000.00 $0.00 $0.00 $0.00 $0.00
Variable expenses $16,700.00 $18,370.00 $20,207.00 $22,227.70 $24,450.47
Fixed Expenses $7,800.00 $8,580.00 $9,438.00 $10,381.80 $11,419.98

7MANAGE FINANCE
Total Payments $48,500.00 $26,950.00 $29,645.00 $32,609.50 $35,870.45
Net cash generated $66,500.00 $99,550.00 $109,505.00 $120,455.50 $132,501.05
Discounting factor @ 10% 0.869565217 0.756143667 0.657516232 0.57175325 0.49717674
Discounted cash flow $57,826.09 $75,274.10 $72,001.32 $68,870.82 $65,876.44
Assumed discounting rate 15%
NPV
Calculation of NPV
Particulars Amount
PV of cash flow $339,848.77
Terminal Value $132,503.05
Total Value $472,351.82
Less:
Initial Investment $49,700.00
Net Present Value $422,651.82
Growth rate assumed for calculating terminal value is 15%.
Part B:
Negotiation undertaken with the relevant groups and the individuals for building
commitment to the plans:
For establishing, the budget created an effective communication has to be established
between the owners and the workers of the printing entity. The communication is being made in
respect of the ways the daily operations of the entity will have to be concluded for the purpose of
delivering the requisite product to the customer of the company. the minimum use fo the papers

8MANAGE FINANCE
and the appropriate amount of ink has to be used forte purpose of ensuring that the costs are kept
under control and the value that is delivered to the customer is not hampered.
The links between the budget and the achievement of the objectives of the entity is a very
crucial one and the only one whose adoption ensures that the value is created for the entity at the
lowest possible costs being incurred on the part of the entity (Doherty et al., 2014). The linkage
between the budget and the result is so strong because of the fact that the costs that is incurred by
the entity in respect of the projects or the products that are being produced by it have a direct
bearing on the profit that is earned by the company by selling the products. If the costs that are
incurred by the entity are very high, then the profit margin that is being earned by the entity will
reduce significantly.
Part C:
Recording systems and the documentation process that will be adopted for the purpose of
monitoring and controlling all the activities as per the plans:
For recording, the orders that have been made the entity will make use of software that
will link the process of recording of data with that of the code of the email that is being received
by the entity from the customer. As per the code of the email the entity the requirement file of
the customer will also be attached. After proper telephonic or personal communication has been
established regarding the requirements of the project that has been sent by the customer, the
recording of the same will be done as revenue for the entity. For the purpose of reconciling the
revenue and the costs of the entity the proper recording of the transaction is very essential. After
the recording is being done the documentation of the same will help the entity to ensure that it is

9MANAGE FINANCE
able to defend itself in case of any legal matters or provide the auditor with the requisite
information for the purpose of audit.
Risk management and contingency plan:
For the purpose of effective mitigation of the risks that are being faced by the entity it is
required that the entity keeps itself ready with a contingency plan. The contingency plan in the
case of this business will be to ensure that the advice regarding the changes that are occurring in
the environment of the entity are being taken from the industry experts and proper
communication is being established between the various constituent of the changes and the
owner of the entity. This will ensure that effective mitigation of the risk takes place within the
entity.
Policies and the procedures for the proper maintenance of records of the financial
performance and evaluation of the effectiveness of the financial management process:
For the purpose of maintain the records of the financial performance of the entity the help
of the accounting softwares will be taken. In case the information required by the software is not
in possession of the company then the reason for its absence will immediately be taken up for
consideration by the entity.

10MANAGE FINANCE
Reference
Chwieroth, J. M. (2015). Managing and transforming policy stigmas in international finance:
Emerging markets and controlling capital inflows after the crisis. Review of International
Political Economy, 22(1), 44-76.
Doherty, T. L., Horne, T., & Wootton, S. (2014). Managing public services-implementing
changes: a thoughtful approach to the practice of management. Routledge.
Zhao, L., & Huchzermeier, A. (2018). Managing Supplier Financial Risk with Pre-shipment
Finance Instruments. In Supply Chain Finance (pp. 121-142). Springer, Cham.