FM8A Corporate Finance Assignment Wei Jiang CT0171246 Question 1. a) Calculate the net initial outlay for this project in MMK = $95‚000 = $100‚000 + $2‚000 × + $3‚000 880 $1 = $100‚000 = 88‚000‚000 b) Calculate after-tax cash flows in MMK for years 1 through 4. Thanlyn Limited Statement of Operating Cash Flow for Year 1 to Year 4 Year 1 Year 2 Year 3 Year 4 MMK MMK MMK MMK 100‚000‚000 100‚000‚000 100‚000‚000 100‚000‚000 40‚000‚000 40‚000‚000 40‚000
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Capital budgeting is the process of evaluating a company’s potential investments and deciding which ones to accept. A company’s market value added (MVA) is the sum of all its projects’ net present values (NPVs). Basically‚ one can calculate the free cash flows (FCFs) for a project in much the same way as for a firm. When a project’s free cash flows are discounted at the appropriate risk-adjusted rate‚ the result is the project’s value. One difference between valuing a firm and a project is the
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Pinkerton Group Project Executive Overview The security guard services industry consisted of two segments: proprietary guards and contract guards. The historical growth was driven by companies realizing‚ that contracting guards allowed them gain operating flexibility instead of managing their own security personnel. In 1987 security guard services was a $10 billion industry growing at 6% a year. Due to the industry being very mature‚ fragmented‚ and price competitive there was an ongoing
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Discounted Cash Flow | | 268‚977 | 377‚479 | 343‚163 | 311‚966 | 283‚606 | 218‚310 | 198‚464 | 180‚422 | Outstanding Balance | -1‚200‚000 | -904‚125 | -447‚375 | 9‚375 | 466‚125 | 922‚875 | 1‚309‚625 | 1‚696‚375 | 2‚083‚125 | NPV (Add 1 to 8 yearsDCF – 1‚200‚000) | 982‚388 | | | | | | | | | Payback
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| 2013 | | Blake Hall College Saiful Hasan | [Business Decision Making] | [Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.] | Contents Task 1 1 Task 2 7 Task 3 10 Task 4 12 Task 5 18 Reference 20 Task 1 Background A lots of studies shows how IT system works as a enabler rather the just
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P1 1.1 Identify (i.e. - list down) at least 4 sources of finance available to Blue Mountain Solutions. The sources of finance available for Miss Begun and her new establish business “Blue Mountain Solutions” are: 1. Loan from bank 2. Government Grants 3. Share capital issued 4. Bank Overdraft 5. Finance leasing 6. Sell of assets P2 1.2 Assess the implications of different sources finance (e.g. - equity financing and debt financing) for Blue Mountain
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a firm’s future Should we build this plant? All rights reserved - Christopher B. Alt 2 Key Steps in Capital Budgeting Estimate CFs (inflows & outflows) Assess riskiness of CFs Determine the appropriate cost of capital Find NPV and/or IRR Accept if NPV > 0 and/or IRR > WACC All rights reserved - Christopher B. Alt 3 Independent vs. Mutually Exclusive Projects Independent projects: if the cash flows of one are unaffected by the acceptance of the other Mutually exclusive projects:
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In order for everyone to have knowledge of what is about to take place in the upcoming weeks I will be defining and explaining some very vital information on Net Present Value (NPV)‚ the Internal Rate of Return (IRR) so that these methodologies could be used effectively throughout the company. Net Present Value (NPV) The basic definition for the net present value is the capital budgeting to see how successful a company or organization is. This particular technique is really used to make certain
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CHAPTER 9 MAKING CAPITAL INVESTMENT DECISIONS Solutions to Questions and Problems 1. The $7 million acquisition cost of the land six years ago is a sunk cost. The $9.8 million current aftertax value of the land is an opportunity cost if the land is used rather than sold off. The $21 million cash outlay and $850‚000 grading expenses are the initial fixed asset investments needed to get the project going. Therefore‚ the proper year zero cash flow to use in evaluating this project is
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reduced labor for transporting items into and out of inventory‚ reduced inventory levels‚ more accurate tracking of inventory‚ and space savings (Wikipedia‚ 2014). VIA Consulting is going to help CanGo to calculate the costs of the new ASRS system. Utilizing tools like net present value (NPV) and internal rate of return (IRR)‚ we will examine and evaluate if the investment will benefit economically the organization. The cost for a new ASRS system is approximately of $2‚000‚000
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