Accounting for Business Decision Making Assignment Ali Nafiz S1409011055 Submitted on 9th November, 2014 Table of Contents Task 1 Task 2 Task 3 2-4 5-7 8-10 1 Ali Nafiz S1409011055 TASK 1 a) Anhad Sdn. Bhd. Budgeted statement of profit for the year ending 31 October 2014 RM (000s) Revenue (120000 × 8)1 Less Variable overheads Direct Materials (1200 × 2) × 95%2 Direct Labour (1200 × 1.32)3 Production overheads Selling overheads Distribution overheads Contribution Less Fixed overheads7
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project. It is calculated as payback period = cost of project / annual cash inflows. 3. Describe the Internal Rate of Return (IRR) method for determining a capital budgeting project's desirability. What is the acceptance benchmark when using IRR? The internal rate of return (IRR) is a rate of return used in capital budgeting to measure and compare the profitability of investments. It is also called the discounted cash flow rate of return (DCFROR) or simply the rate of return (ROR). In the context
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order to make a comparison and choose just one or a few. It is the process in which a business determines whether projects such as building a new plant or investing in a long-term venture are worth pursuing. Oftentimes, a prospective project's lifetime cash inflows and outflows are assessed in order to determine whether the returns generated meet a sufficient target benchmark. Ideally, businesses should pursue all projects and opportunities that enhance shareholder value. However, because the amount of
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analysis techniques. The first section of the test addresses discounted cash flow analysis. See how you would do by answering the following questions. a. Draw time lines for (a) a $100 lump sum cash flow at the end of year 2, (b) an ordinary annuity of $100 per year for 3 years, and (c) an uneven cash flow stream of -$50, $100, $75, and $50 at the end of years 0 through 3. Answer: (Begin by discussing basic discounted cash flow concepts, terminology, and solution methods.) A time line is
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capital of the firm, use the WACC to discount the operating cash flows adjusted for inflation and earned in the next 6 years, add the tax shield given by the depreciation minus the initial investment (since the case doesn’t any CCA rate, we calculate tax shield both with the CCA rate 45% which is checked through internet and without the CCA rate), minus the initial investment 9,000,000, for each scenario (the original operating cash flow 2.5 million, 30% higher and 15% lower). First, the nominal
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different. But what we call mad money, they call free cash flow. Free cash flow is the remaining cash flows that are available for use by a company to bring added wealth and value to the shareholders after all the bills have been paid. It represents real cash. The presence of free cash flow indicates that a company has cash to expand, develop new products, buy back stock, pay dividends, or reduce its debt. High or rising free cash flow is often a sign of a healthy company that is thriving in
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Chapter 18: Chapter 19: Chapter 20: Chapter 21: Chapter 22: Chapter 23: Chapter 24: Chapter 25: Chapter 26: Chapter 27: Chapter 28: Chapter 29: Chapter 30: Chapter 31: Answers to End-of-Chapter Problems Accounting Statements and Cash Flow ................................................................... Financial Planning and Growth ............................................................................... Net Present Value ...............................................
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TO: Lecturer FROM: Student RE: Mercury Athletic Footwear Acquisition Net Present Value of Mercury Athletic Enterprise The results of my financial analysis based on the Free Cash Flow Method considering the base case of financial projections and assumptions for Mercury Athletic Footwear collated and developed by John Liedtke indicate that that the project to acquire Mercury Althletic has a positive net present value at $243,025 (in thousands) [ given by PV(FCF)=86,681+ PV (Terminal Value) =156
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(assuming 64 checks average 200.00 baht) -Project life is six years with a sales growth of 6% per annum -Zero salvage value for depreciation using the straight line method -10,000.00 baht is charged for common area maintenance fees PBH will use cash on hand for the capital improvements and so based on the interest rates on their deposits at Siam Commercial Bank the
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planning and managing of a firms investment in non-current assets. The main thing is the cash flow. Evaluating; * Size of future cash flows * Timing of future cash flows * Risk to future cash flows. Cash flow timing is when a dollar today is worth more than a dollar at some future date. There is a trade-off between the size(amount) of an investements cash flow, and when the cash flow is recieved. So a dollar today, is more worth than a dollar a yeat from now. * The
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