BUACC3701: Financial Management

The use of an accurate Excel (for Windows) 1. The setting and presentation. -an input section which contains all variables crucial to the analysis. -an appropriately designed output section. -Efficient use of the spreadsheet functions and facilities: formulas, cell names, documentation, all variables in “input” section, etc. 2.Accuracy of calculations and Analysis. Part B.750 words approx. To have or not to have. In a company setting is debt worth having? Discuss in terms of the agency (managers and owners) relationship and its impact on other stakeholders.Required

1.    Evaluate the alternative capital investments. Justify your answers to the following questions with full explanations. You will need to calculate the net present value, internal rate of return and payback period for each alternative.

2.    The old machines can either be replaced now or in four years’ time. Calculate the net present value foregone by keeping the old machines for another four years.

3.    Which replacement equipment (EM or JB) alternative would you recommend, and for what reasons?   

4.    Which new machine (Matz or Ebz) alternative would you recommend, and for what reasons? 

5.    Which combination of Matz and Ebz and EM and JB would be recommended?

6.    Although management expects that inflation will remain constant over the term they have requested a schedule showing the impact of inflation on the net present value of the proposals over the range one to ten per cent. Graph the results and briefly interpret the data and graph.


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