Managerial Finance: Feasibility Analysis of Manufacturing Plant for Dell Inc

Running head: MANAGERIAL FINANCE
Managerial finance
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1MANAGERIAL FINANCE
Executive summary
Primary purpose if this report is assisting Dell Inc in taking decision regarding start up its
manufacturing plant through analysing the feasibility of the project. Different method those will
be used by the analyst to evaluate the projects acceptability are internal rate of return, payback
period and NPV. Along with these approaches the project will also be analysed in context of
fulfilling the requirement of company’s financial discipline.

2MANAGERIAL FINANCE
Table of Contents
Introduction......................................................................................................................................3
Answer 1..........................................................................................................................................3
a. Yearly depreciation of plant.................................................................................................3
b. Cash flow for year 1 – 9.......................................................................................................4
c. Cash flow for year 0.............................................................................................................4
d. Cash flow for terminal year..................................................................................................5
e. Calculation and interpretation of NPV.................................................................................5
f. Payback period and IRR.......................................................................................................6
g. Applicability of discount rate...............................................................................................6
Answer 2..........................................................................................................................................7
a. Interest rate...........................................................................................................................7
b. Pros and cons of financial discipline newly applied.............................................................7
Conclusion and recommendation....................................................................................................7
Reference.........................................................................................................................................9