Significance of Proposed Project for Pinto Limited - Financial Viability Analysis

Running head: FINANCE
Finance
Name of the Student:
Name of the University:
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FINANCE
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Table of Contents
Memo to Pinto’s CEO Stating the significance of the new proposed project and the profit it
could obtain overtime:................................................................................................................2
Reference and Bibliography:......................................................................................................6

FINANCE
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Memo to Pinto’s CEO Stating the significance of the new proposed project and the
profit it could obtain overtime:
Memorandum
To: CEO of Pinto Limited
From: Project Analyst
Date: 20-05-2018
Subject: Analysing the new project and detecting its financial viability
Dear Sir,
The memorandum aims in evaluating the proposed projects, which could help in
understanding the level of profits that could be provided from the investment. In addition,
adequate financial appraisal techniques are used in understanding the financial viability of the
project, which could help in improving the level of profits from operations. Moreover, the
cash inflows and outflows are mainly calculated for the project, which indicates financial
viability of the project. The project is evaluated on the basis of investment appraisal
techniques such as Net present value, Internal rate of return, profitability index, discounted
payback period and payback period. The evaluation of the investment option helps in
understanding the level of profits that could be generated from investment.
The cash inflows and outflows of the proposed project is detected by calculating the expense
and income incurred by the proposed project. In addition, the use of external consultant was a
viable approach, which helped in understanding the overall progress and demand that could
be generated from investment. Moreover, the expense on external consultant is not
considered, as initial investment of the project is taken as sunk cost for the company.