ACC08702: Discuss whether you would use the Net Present Value (NPV) or the Internal rate of Return (IRR) appraisal method (or both) to select a project: Managerial Finance Assignment, ENU, Singapore

Question 1

Discuss whether you would use the Net Present Value (NPV) or the Internal rate of Return (IRR) appraisal method (or both) to select a project?

X plc is permitted to spend £4m on investment projects at time zero. The cash flows for five projects are as follows:

The Weighted Average Cost of Capital (WACC) / discount factor is 12%, all projects are divisible and none may be repeated. Which project(s) should be undertaken to maximize NPV in the presence of the capital constraint?

Question 2

Critically discuss financial ratios available to analyse a firm.

Question 3

Describe and discuss the usefulness of each of the three main primary financial statements: Statement of Financial Position/ Balance Sheet, the Income Statement and the Statement of Cash Flows.

Section B – Answer TWO questions only

 Question 4

Discuss whether you would use the Net Present Value (NPV) or the Payback method (or both) to select a project?

Question 5

Which are the purposes of budgeting? Which are the two alternative methods to budget? Which one do you think may be relatively more appropriate in different scenarios?

Question 6

Critically discuss costs that should not be included in the estimations when appraising a project.