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Write 4 page essay on the topic Strategic Management and Finance.Download file to see previous pages... 1,670,000 Net cash flow per year 690,000 610,000 1,350,000 1,505,000 1,670,000 Net Present V
Write 4 page essay on the topic Strategic Management and Finance.
Download file to see previous pages...1,670,000
Net cash flow per year
690,000
610,000
1,350,000
1,505,000
1,670,000
Net Present Value:
Present
Cash Flows
PV Factors
Value
Year 1
690,000
0.8929
616,071
Year 2
610,000
0.7972
486,288
Year 3
1,350,000
0.7118
960,903
Year 4
1,505,000
0.6355
956,455
Year 5
1,670,000
0.5674
947,603
Salvage return
700,000
0.5674
397,199
Total
4,364,519
Investment
(10,000,000)
Net Present Value
(5,635,481)
Payback Period:
Net
Remaining
Cash Flow
Investment
Payback period is
Longer than the project life of 5 years
Investment
10,000,000
Year 1
690,000
9,310,000
Year 2
610,000
8,700,000
Year 3
1,350,000
7,350,000
Year 4
1,505,000
5,845,000
Year 5
2,370,000
3,475,000
Scheme 2
Net Cash Flow per Year
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Expected annual cash receipts from sales
2,600,000
2,800,000
3,000,000
3,200,000
3,500,000
3,500,000
Expected annual costs of new product
Cash expenses
1,550,000
1,620,000
1,720,000
1,810,000
1,930,000
2,060,000
Depreciation expense
583,333
583,333
583,333
583,333
583,333
583,333
Net income
466,667
596,667
696,667
806,667
986,667
856,667
Net cash flow per year
466,667...
The reduction in the inventory turnover resulted from the significant increase in the stocks. This increase might be a result of the company's hedging for foreseen price increases.
The Board should accept Scheme 2. Based on NPV, it has a much lower negative NPV than Scheme 1. Moreover, it has a shorter payback period than Scheme 2, which according to the above calculations will never be able to pay back the company's 10,000,000 investment.
PT Trada Maritimes debuted in the Indonesia Stock Exchange on September 2, 2008 (Trada Maritime 2008). Right after its debut, the stock price reached as high as 27 per cent of its IPO price. The company went public as a result of its additional capital requirements on its expansion plan for 2009. Trada Maritimes plans to spend as much as $315 million to purchase additional vessels over the next five years (Trada Maritime 2008).
Globus Maritime Limited received the International IPO of the Year on February 1, 2008 at the Quoted Company Awards (Reuters 2008). Globus was first listed in the London Stock Exchange under its AIM index in June 2007 at an IPO price of 300 pence (www.timagenislaw.com. www.investegate.co.uk). Right after its debut, the price of the company's stock skyrocketed as show in the graph below.
