New

Connect on Whatsapp : +97143393999 , Uninterrupted Access, 24x7 Availability, 100% Confidential. Connect Now

Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!
loader
Add File

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Guaranteed Higher Grade!

ACC00716 Finance

tag 0 Download 4 Pages / 954 Words tag 23-11-2020

Question:

This assignment has a 25% weighting in your overall mark for this unit and focuses on content from Weeks 6, 7 and 8. The assignment will be marked out of 25 and marks will be allocated as indicated in the rubric below. Your total assignment submission will consist of a word document that should not exceed 1,000 words (excluding reference list), plus a spreadsheet submission.
 
The assignment is based on the hypothetical case information below. Pinto Limited has recently been subject to significant competition from overseas manufacturers with much lower costs. To combat this, Pinto is considering a project that will see it move into a new product market considered riskier than its current operations. The CEO has asked you to undertake a financial analysis of the proposed project nd present your recommendations in a short memo. As part of your financial analysis you will calculate NPV, IRR, payback period, discounted payback period and profitability index. The project requires an upfront investment in plant and equipment of $15 million, which will be depreciated on a straight-line basis over the five-year life of the project. The equipment is not expected to have any significant salvage value at the end of its depreciable life.

Pinto paid $25,000 in fees to consultants for a market analysis related to the project. This analysis predicted sales volume of 200,000 units in the first year, which would grow by 50% per year in years
two and three, and fall by 50% in each remaining year as demand wanes. Selling price in the first year is expected to be $75 and grow by 3% each year after that. Pinto’s operations manager has estimated cost of goods sold for the project will equal 60% of sales revenues and selling, general and expenses directly related to the project (excluding depreciation) will be $1 million in the first year and increase by 5% per year thereafter. The operations manager has not included in his estimates any cost for a project operations base because the plan is to use a building the company already owns. Currently Pinto rents this building to another company for $250,000 per year.

The project will require an upfront investment in net working capital equal to 20% of the year 1 sales
revenue forecast. This investment in working capital will be fully recovered at the end year 5. The company has a 10% weighted average cost of capital and is subject to a 30% tax rate.
 
Required: Prepare
(1) a spreadsheet financial analysis of the proposed project and
(2) a memo to Pinto’s CEO that briefly explains and justifies your chosen methods and any assumptions made, summarises your findings, and presents your recommendations on the proposed project ?
Download Sample Now

Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.

Upload
Unique Document

Document
Under Evaluation

Get Money
into Your Wallet

Total 4 pages

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help (2020) Finance [Online]. Available from: https://myassignmenthelp.com/free-samples/acc00716-finance/the-financial-analysis.html
[Accessed 18 August 2022].

My Assignment Help. 'Finance' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/acc00716-finance/the-financial-analysis.html> accessed 18 August 2022.

My Assignment Help. Finance [Internet]. My Assignment Help. 2020 [cited 18 August 2022]. Available from: https://myassignmenthelp.com/free-samples/acc00716-finance/the-financial-analysis.html.


We Can Help!

Get top notch assistance from our best tutors !
Excel in your academics & career in one easy click!

icon

Other Samples

Content Removal Request

If you are the original writer of this content and no longer wish to have your work published on Myassignmenthelp.com then please raise the content removal request.

icon

5% Cashback

On APP - grab it while it lasts!

Download app now (or) Scan the QR code

*Offer eligible for first 3 orders ordered through app!

screener
ribbon
callback request mobile
Have any Query?