Save Your Distinction Grade Using Most Accurate Online MGT200 Management Accounting And Finance Assignment Help Service!

Home   Course   MGT200 Management Accounting And Finance Assignment Help
Previous << || >> Next

MGT200 Management Accounting And Finance

DO YOU WANT TO EXCEL IN MGT200 MANAGEMENT ACCOUNTING AND FINANCE ASSIGNMENT - ORDER AT EXPERTSMINDS!

Learning outcome: 1. Apply capital budgeting practices and evaluate investment decisions.

2. Apply knowledge of working capital to effectively manage a business for a given situation.

3. Compare and contrast financing options for a given situation and make recommendations.

4. Discuss the principles of capital structure and cost of capital, and calculate the cost of capital.

5. Apply management tools to assist in the planning and control of business operations.

6. Use management accounting information to assist decision-making in a given business situation.

Question 1: A. Prepare a schedule showing the incremental revenue, incremental operating expenses and incremental depreciation during each of the next 6 years.

B. Calculate the accounting rate of return on the dyeing machine, using the initial investment as the denominator.

Answer:

  0 1 2 3 4 5 6
Incremental Revenue   50,000 50,000 50,000 50,000 50,000 50,000
Incremental Operating Expenses 20,000 20,000 20,000 20,000 20,000 20,000
Incremental Depreciation 16,667 16,667 16,667    16,667 16,667 16,667
Net Incremental Earnings (Investment) (1,00,000) 13,333 13,333 13,333 13,333 13,333 13,333

Accounting Rate of Return 

Initial Investment = PV of Earnings

PV of Earnings = 13333*PVAF(r%,6)

Therefore, r -6.03%

Accounting rate of return is the return calculated on accounting profit made through initial investment. Therefore, earnings will include the effects of depreciation.

Question 2: Identify the annual net relevant cash flows and use this information to assess the project on a net present value basis at 1 Jan 2014. Estimate the internal rate of return of the project.

Answer:

 

2014

2015

2016

2017

Units produced & sold

400

600

500

200

Per Unit:

       

Sale Price

 $1,400

 $1,400

 $1,400

 $1,400

Costs: Variable Labour

 $200

 $200

 $200

 $200

Variable Material

 $100

 $100

 $100

 $100

Per Unit Contribution

 $1,100

 $1,100

 $1,100

 $1,100

Total Contribution

 $4,40,000

 $6,60,000

 $5,50,000

 $2,20,000

Less: Administrative costs

 $90,000

 $90,000

 $90,000

 $90,000

Lease Rental (advance for next year)

 $1,00,000

 $1,00,000

 $1,00,000

 $-  

Total relevant Net Cash Inflows

 $2,50,000

 $4,70,000

 $3,60,000

 $1,30,000

Working Capital Outflow

 $1,70,000

Plant purchased

 $6,00,000

Advance Lease Rental

 $1,00,000

Total Initial Outflow

 $8,70,000

 

2014-Beginning

2014-End

2015-End

2016-End

2017-End

 

Relevant Cash flows

 $(8,70,000)

 $2,50,000

 $4,70,000

 $3,60,000

 $1,30,000

 

IRR

16%

         

Discount Rate

15%

         

Present Value

 $(8,70,000)

 $2,17,391

 $3,55,388

 $2,36,706

 $74,328

 $13,813

Therefore, Net Present Value = $13,813 

Hence, the project shall be accepted and the company shall produce the new laptop by getting the factory on Lease.

ORDER NEW MGT200 MANAGEMENT ACCOUNTING AND FINANCE ASSIGNMENT AND GET 100% ORIGINAL SOLUTION AND QUALITY WRITTEN CONTENTS IN WELL FORMATS AND PROPER REFERENCING!

Question 3: You are required to evaluate the management of working capital for Healthy & Fresh Ltd, based on above reveal, changes in its operating cycle and financing scheme.

Answer: A current ratio of 2:1 or above indicates that the company has a strong liquidity position. In the given case, Healthy & Fresh ltd have a healthy current ratio in 2012 (2.61:1), which starts to decline in 2013 and further in 2014. This shows that the company's liquidity is not as strong as it was in 2012. Moreover, with an increase in settlement period for debtors (37 to 47 from 2012 to 2014) and inventory turnover days (48 in 2012 to 65 in 2014) decreases liquidity further for the company to meet its short-term obligations.

With an increase in the average settlement period to creditors beyond the 30 days period in 2014 (31 days), the company loses on the 2% discount it gets within 10 days of payment "With an increase in Non-current assets and long-term finance, it can be concluded that the company is funding its non-current assets from loans along with some liquid reserves of their own. "

Question 4: A. You, the financial manager of Cando Franchise Ltd, is asked for prepare an analysis of the three alternatives for the board members to consider.

B. As a financial manager, you are also expected to give your comments on above three alternatives.

Answer:

Funds raised      
Borrowing          40,00,000    
Ordinary shares            40,00,000  
Preference shares              40,00,000
       
Annual NPBIT            8,00,000            8,00,000            8,00,000
Borrowing Interest            4,40,000                         -                           -  
NPBT            3,60,000            8,00,000            8,00,000
Taxation            1,08,000            2,40,000            2,40,000
NPAT            2,52,000            5,60,000            5,60,000
Preference Dividends                         -                           -              3,52,000
Dividend available to Ordinary Shareholders            2,52,000            5,60,000            2,08,000
       
Proportion of Dividend available to existing shareholders            2,52,000            4,66,667            2,08,000
Dividend to New Shareholders                         -                  93,333                         -  

As per the above solution, it is clear that Cardo Franchise Ltd. should opt for issuing 100,000 ordinary shares for funding the growth plan, as Plan B offers the highest share of dividend to its existing shareholders as compared to the other two plans. Moreover, the control of the firm would stay as usual with the family (as they will own 500,000 ordinary shares out of the total 600,000 shares i.e. 83.33% control).

24/7 AVAILABILITY OF TRUSTED MGT200 MANAGEMENT ACCOUNTING AND FINANCE ASSIGNMENT WRITERS! ORDER ASSIGNMENTS FOR BETTER RESULTS!

Tag This :- EM201940GAU510FAC, MGT200 Management Accounting And Finance Assignment Help

get assignment Quote

Assignment Samples

    The Rememberer Essay Assignment Help

    the rememberer essay assignment help and Homework help-Write an analysis focusing on this character's motivations, a personality trait that he or she undergoes.

    Cell Membrane Assignment Help

    cell membrane assignment help - Compare and contrast the processes of diffusion, facilitated transport, osmosis, and active transport of molecules

Get Academic Excellence with Best Skilled Tutor! Order Assignment Now! Submit Assignment