This project evaluates the financial aspects of Frozen Ltd's investment in a new machine, covering key areas such as initial investment calculation, annual operating net inflows, and the impact of working capital changes. The analysis includes the determination of terminal cash flows and the plotting of relevant cash flows, alongside the application of various appraisal techniques, including the payback period, net present value (NPV), and internal rate of return (IRR). The assignment also explores the relationship between working capital and long-term investments, the consequences of neglecting working capital in capital budgeting, and the implications of capital rationing. Furthermore, it examines the impact of cannibalization on project decisions and delves into cash management, including long-term and short-term financing, aggressive versus conservative funding approaches, and financing options for non-current assets, comparing the benefits of buying versus leasing equipment, including after-tax cash flow calculations.
![[object Object]](/_next/static/media/star-bottom.7253800d.svg)
