Managing Financial Resources

Managing Financial Resources
Assessment Task Three: Business Finance
Whizz Bang Corporation Ltd (WBC)

Executive summary
This report discusses three business related scenarios for a company called Whizz Bang Corporation
Ltd (WBC). This company manufactures spare parts for heavy transport materials. It addresses all
three scenarios and analyses the requirements of the business depending on the analysis. The report
explains the necessary requirements of each of the scenarios.
The first scenario discusses the capital acquisition of a worn out equipment at WBC. A staff member
had requested an approval from the manager to replace a worm out equipment. Unfortunately, not
enough information was provided to the Manager, as it was assumed that the request would be
approved. This section describes information that needs to bee considered before replacing the item
due to the equipment being expensive. It is important to understand the reasons behind replacing
the worn out equipment which is discussed in this section.
The second scenario discusses the requirements of a project proposal. The manager has identified a
potential opportunity for the company and is required to understand the financial requirements to
implement the project. This includes the investment calculations of NPV, IRR and payback. It
discusses the advantages and disadvantages of using these investment methodologies and also
recommends which one would be better suited to understand the investment requirements to use
for the assessment of the proposed project. It also explains other factors to consider for assessing
the project proposal.
The third scenario provides information in regards to the Weighted Average Cost of Capital (WACC)
for WBC. This is defined as the company’s weighted average cost of capital which is assessed
depending on the organisation’s financial structure. It explains that this calculation method can
become complicated, which is why it is better not to use this pro the project proposal and
requirements.
The report then provides a conclusion, which gives a good summary and recommendations of the
information discussed in this report.
Table of Contents
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Executive summary...............................................................................................................................1
Introduction..........................................................................................................................................3
Discussion.............................................................................................................................................3
Scenario 1: Capital acquisition...........................................................................................................3
Scenario 2: Project Proposal..............................................................................................................4
Scenario 3: Project Financing.............................................................................................................5
Conclusion.............................................................................................................................................6
References............................................................................................................................................7
Appendix 1............................................................................................................................................8
Appendix 2............................................................................................................................................8
Appendix 3............................................................................................................................................9
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