Assignment: Net Present Value and Capital
AMITY SCHOOL OF DISTANCE LEARNING
Post Box No. 503, Sector44
Noida – 201303
FINANCIAL MANAGEMENT
Assignment A Marks 10
Answer all questions.
1.
a. Should the titles of controller and treasurer be adopted under Indian context? Would you like to modify their functions in view of the company practice in India? Justify your opinion?
b. A firm purchases a machinery for Rs. 8,00,000 by making a down payment of Rs.1,50,000 and remainder in equal instalments of Rs. 1,50,000 for six years. What is the rate of interest to the firm?
2.
a.Explain the mechanism of calculating the present value of cash flows..What is annuity due? How can you calculate the present and future values of an annuity due? …show more content…
You are required to prepare a statement showing the working capital needed o finance a level of activity of 70,000 units of output. You may assume that production is carried on evenly throughout the year and wages and overheads accrue similarly.
2. a. Through quantitative analysis prove that PI is a better technique than NPV in Capital Budgeting.
b..A company is considering the following investment projects:
 Cash Flows (Rs.) 
Projects  
 Co C1 C2 C3 
  …

Net Present Value Essay
603 Words  3 Pages1. Basic present value calculations Calculate the present value of the following cash flows, rounding to the nearest dollar: a. A single cash inflow of $12,000 in five years, discounted at a 12% rate of return. b. An annual receipt of $16,000 over the next 12 years, discounted at a 14% rate of return. c. A single receipt of $15,000 at the end of Year 1 followed by a single receipt of $10,000 at the end of Year 3. The company has a 10% rate of return. d. An annual receipt of $8,000 for three…

Net Present Value Calculation: A Questionnaire
370 Words  2 Pages1. This first question is a net present value calculation. The future cash flows must be discounted, because of the effects of interest and inflation. Those two factors reduce the value of cash flows in the future, so that money received or paid in the future is not worth as much as the same dollar amount paid today. In this example, there is a project, and the cash flows associated with the project need to be discounted. If the final value, the net present value (NPV) is greater than zero, the company…

Essay on Net Present Value and Percent
2231 Words  9 PagesFin 3320 Practice Questions1 – Total Course 1. Your wealthy uncle has set up a special account that will give you $500,000 on your 35th birthday. Assuming you are age 21 (thus 14 years from receiving this), what is the present value of this gift if the appropriate discount rate is 8.0%? (Ch5) a. $170,231 b. $282,449 c. $442,619 d. $191,206 e. $734,664 2. You need $10,900 for the down payment on a new car. You presently have $5,000 in savings for which you expect to earn 6% (annual rate, compounded…

Net Present Value and Software Project Management
1655 Words  7 PagesINF3708/201/3/2013 SOFTWARE PROJECT MANAGEMENT TUTORIAL LETTER 201 FOR INF3708 SOLUTIONS Solutions (Highlighted)  Assignment 01 – Semester 1 ASSIGNMENT 01  COMPULSORY Study material Total marks Hughes & Cotterell: Chapters 1 – 4 25 marks = 100% UNIQUE NUMBER: 203647 1. A 1. 2. 3. 4. 5. is said to be “A specific plan or design” or “A planned undertaking” System Scope Project Software Management 2 INF3708/201 2. Software Project Management scope normally comprises the…

Net Present Value of TMobile's Discount Rate
1413 Words  6 PagesPart I: The formula for net present value is as follows: INCLUDEPICTURE "http://i.investopedia.com/inv/dictionary/terms/NPV.gif" * MERGEFORMATINET Â Source: Investopedia (2012) The net present value of this project if TMobile's discount rate is 4% is therefore as follows: Year 0 1 2 3 4 5 CF 3219000 350000 939000 1122000 500000 400000 PV 3219000 336538.5 868158.3 997453.9 427402.1 328770.8 NPV 260676 d 4% Based on this…

The Caledonia Project: An Analysis of Net Present Value Calculation
503 Words  3 Pagesbe analyzed with a net present value calculation. The future cash flows will be calculated and then discounted to present day, then tabulated so that the net present value of the project is determined. This NPV will allow management to make a decision with respect to whether or not the project should be undertaken or not. Caledonia should focus on free cash flows for the project rather than accounting profit. The reason for this is that the free cash flows are the actual value that is being added…

Net Present Value Calculation for PowerCo Project
478 Words  2 PagesThere are costs for the first two years and then there are net positive cash flows for the subsequent ten years. A net present value calculation will be used in order to determine if the company should undertake this project or not. The present value calculations will be done according to this formula: INCLUDEPICTURE "http://i.investopedia.com/inv/dictionary/terms/NPV.gif" * MERGEFORMATINET Source: Investopedia (2012) The present value of the costs is as follows: Year 1 2 Cash Flow 25…

Essay on Net Present Value and Moderate Keywords
10098 Words  41 PagesKeywords: capacity cushion, variation in demand, changing product mix, supply uncertainty 11. A smaller capacity cushion may be required if a process is highly capital intensive. Answer: True Reference: Capacity Timing and Sizing Strategies Difficulty: Moderate Keywords: capacity cushion, capital intensity 12. A larger capacity cushion can help firms uncover process inefficiencies, so they can find ways to correct them. Answer: False Reference:…

Essay on Net Present Value and Capacity Planning
1269 Words  6 PagesPV(Revenue) X = PV(Investment) A=S/X B = SQRT(T) * sigma Options Value of 2nd Phase = 140/(1+0.3)3 = 63.72 = 100/(1+0.3)2 = 59.17 =1.07 =sqrt(2)*.20 = 0.28 14.6% of S =9.30 Total = 7.6 + 9.30 = 1.70 Question 2: Suppose that you are hired by a company that is evaluating the profitability of a new product. The product launch will require a significant investment: $300 million during the first year for manufacturing capacity, working capital, and marketing and distribution. Revenues are expected to…

The Net Present Value Analysis: A Study Guide
363 Words  2 PagesPart I: A. The present value of my future bank account is: 15,000 / (1+.07) = $14,019. If the rate is only 4%, then the present value of my future bank account is 15,000 / (1.04) = $14,423. B. The present value of Account A is 6500 / 1.06 = $6132.08. The present value of Account B is 12,600 / (1.06)^2 = $11,213.96. C. The net present value of the gold mine is as follows: Year 0 1 2 3 Cash Flow Â 49 61 85 PV 45.79439 53.27976 69.38532 NPV 168.4595 D 7% This is based…
More about Assignment: Net Present Value and Capital

Net Present Value Essay
603 Words  3 Pages 
Net Present Value Calculation: A Questionnaire
370 Words  2 Pages 
Essay on Net Present Value and Percent
2231 Words  9 Pages 
Net Present Value and Software Project Management
1655 Words  7 Pages 
Net Present Value of TMobile's Discount Rate
1413 Words  6 Pages 
The Caledonia Project: An Analysis of Net Present Value Calculation
503 Words  3 Pages 
Net Present Value Calculation for PowerCo Project
478 Words  2 Pages 
Essay on Net Present Value and Moderate Keywords
10098 Words  41 Pages 
Essay on Net Present Value and Capacity Planning
1269 Words  6 Pages 
The Net Present Value Analysis: A Study Guide
363 Words  2 Pages