FINA 3042 : Corporate Finance

Running Head: Corporate Finance
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Project report: Corporate Finance

Corporate Finance
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Contents
Introduction:.....................................................................................................................3
Part A:...............................................................................................................................3
Que 1:................................................................................................................................3
Que 2:................................................................................................................................3
Que 3:................................................................................................................................3
Que 4:................................................................................................................................3
Que 5:................................................................................................................................4
Que 6:................................................................................................................................4
Que 7:................................................................................................................................4
Part B:...............................................................................................................................5
NPV analysis................................................................................................................5
Capital budgeting analysis............................................................................................5
Cost of capital 21%.......................................................................................................5
Associated risk..............................................................................................................5
Conclusion........................................................................................................................5
References:.......................................................................................................................6

Corporate Finance
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Introduction:
This report majorly focuses on an organization, Waterloo Brewing Company. The
financial analysis of the company has been done through focusing on the financial statement
of last 2 years of the company. Along with that, the capital budgeting analysis has also been
done on the company.
Part A:
Que 1:
The financial analysis explains that the main focus of the business should be on the
suppliers and the operating expenses as the level of gross profit and net profit has been
reduced from the last year and the focus on these factors would improve the overall
performance of the business.
Que 2:
The annual report of the company explains that the finance cost of the company is
9.07% which would be improved in near future because of the increment in the debt
financing on a higher rate according to the market demand (Chandra, 2011).
Que 3:
The main sources of long term financing of the business are debt, finance lease and
share equity. There are no restrictions on any of these sources. The business could raise the
funds on the basis of the demand and the requirement of the business. Debt funds are raised
from the market, financial lease stands for the equipment which has been taken on lease and
the shares are the part of ownership (Higgins, 2012).
Que 4:
Sources Advantages Disadvantages
Share capital  Less risk  Higher cost