We are here with you hands in hands to facilitate your learning & don't appreciate the idea of copying or replicating solutions. Read More>>

Looking For Something at vustudents.ning.com? Click Here to Search

www.bit.ly/vucodes

+ Link For Assignments, GDBs & Online Quizzes Solution

www.bit.ly/papersvu

+ Link For Past Papers, Solved MCQs, Short Notes & More

SEMESTER Fall 2017 Corporate Finance (FIN722) Assignment No. 1 Due Date: 16-November-2017 Marks: 20

Due Date: 16-November-2017 Marks: 20

Topic: Capital Budgeting

Techniques Learning Outcomes: After attempting this assignment, students will be able to know that how to compute different capital budgeting techniques and select the projects.

Case Study: Shiner Threads Limited (STL) is in the business of textile and is a renowned supplier of toddler and teens outfits in the industry. The company is equipped with hi-tech machinery and is recognized for its unique designs. Due to its key investment in technology and human capital, company’s financials of last five years depict a continuous increasing trend in sales and profits at the rates of 30% and 35% respectively. Company’s management is now planning to expand its business operations, for which, Research and Development (R&D) department of STL has proposed following three Mutually Exclusive projects based on their market surveys: (It is notable that feasibility report of each project is based on the estimates of six years).

Project 1: The first project proposed by R&D is to open company’s own Clothing Stores. Estimates presented in the feasibility report tell that this project requires an investment of Rs. 1,950,000. This will generate after tax cash inflows of Rs. 400,000 each in the first and second years, Rs. 600,000 each in 3rd, 4th & 5th years while Rs. 900,000 in 6th year. Other information which has been provided in the report is as follow:

Required Rate of Return NPV (Rs.) IRR (%) Profitability Index (Times) Payback period (years) Discounted Payback (years) 15% 125,246 ----- 1.06 3.92 5.68

Project2: The second project proposed by R&D is to open Consultancy Centers. These centers will aim to provide consultancy services to other factories of the industry and to its buyers regarding their real-life problems of doing business. This project requires an initial cost of Rs. 900,000 while it will generate after tax cash inflows of Rs. 300,000 each in first five years and Rs. 500,000 in 6th year. The required rate of return for the project is 28%. However, the feasibility report for this project is not very much comprehensive as it is providing information only about capital budgeting measure of IRR which is approximately 26.7%.

Project 3: The third project proposed by R&D is to open Skill Development Cells. The aim of these development cells will be to launch different professional training courses in the market. The initial investment required for this project is Rs. 1,270,000. This project also requires net working capital of Rs. 180,000 at the start of the project which will be recovered at the end of 6th year. After tax cash inflows estimated to be generated from this project are as follows: Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Rs. 250,000 Rs. 310,000 Rs. 400,000 Rs. 460,000 Rs. 580,000 Rs. 600,000 Other information which has been provided in the report is as follow: Required Rate of Return NPV (Rs.) IRR (%) Profitability Index (Times) Payback period (years) Discounted Payback (years) 15% ------ 18.17% 1.10 ------ 5.54

Requirements

Requirement No. 1: It can be observed that the feasibility report of project 1 is providing values against all capital budgeting measures except IRR. So, you are required to determine the approximate value of IRR to complete the report. (5 Marks)

Requirement No. 2: Although the information provided in feasibility report of project 2 is missing for most of the capital budgeting measures, however, you are required to determine only the values of NPV & Profitability Index (PI) for this project. (5 Marks)

Requirement No. 3: Determine the missing values of NPV and Payback period for project 3 to complete its feasibility report. (8 Marks)

Requirement No. 4: After finding out all the required values of each project, analyze which of the projects should be selected by STL and why? (2 Marks)

Important Instructions:  Working of each missing value carries certain marks so, it is necessary to provide detailed working of each value to avoid any inconvenience. 

Before attempting the assignment, it is advised to consult the relevant lectures, recommended book(s) and the additional material. This additional material has also been provided on VULMS in different lessons. You can view these supplements on VULMS under the link of “lessons” along with PPTs. Other Important Instructions: Please also read the following instructions carefully before attempting the assignment solution. Deadline:  Make sure that you upload the solution file before the due date. No assignment will be accepted through e-mail after due date once the solution has been uploaded by the instructor. Formatting guidelines:  Use the font style “Times New Roman or Arial” and font size “12”.  It is advised to compose your document preferably in MS-Word.  Use black and blue font colors only. Rules for Marking Please note that your assignment will not be graded or graded as Zero (0) if:  It has been submitted after due date  The file you uploaded does not open or is corrupt  It is cheated or copied from other students, internet, books, journals etc. Note: Only in the case of Assignment, 24 hours extra / grace period after the due date is usually available to overcome uploading difficulties which may be faced by the students on last date. This extra time should only be used to meet the emergencies and above mentioned due dates should always be treated as final to avoid any inconvenience. Note related to load shedding: Please be proactive Dear students! As you know that semester activities have started and load shedding problem is also prevailing in our country now a days. Keeping in view the fact, It is requested to all of you to manage to post your activities as early as possible and don’t wait for the due date. For your convenience activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.

+ How to Follow the New Added Discussions at Your Mail Address?

+ How to Join Subject Study Groups & Get Helping Material?

+ How to become Top Reputation, Angels, Intellectual, Featured Members & Moderators?

+ VU Students Reserves The Right to Delete Your Profile, If?


See Your Saved Posts Timeline

Views: 1304

.

+ http://bit.ly/vucodes (Link for Assignments, GDBs & Online Quizzes Solution)

+ http://bit.ly/papersvu (Link for Past Papers, Solved MCQs, Short Notes & More)

+ Click Here to Search (Looking For something at vustudents.ning.com?)

+ Click Here To Join (Our facebook study Group)

Attachments:

Replies to This Discussion

Dear Friends, 

If anyone started working on assignment. Please share something related to assignment.

me also need solution of Fin722 assignment

aoa me also need a solution of FINANCE 722

me also need solution of GBD finance 722

me also need a solution of Assignment kindly sgd  imran.sadiq20@gmail.com

Hello Everyone, 

Please share the assignment solution or at least some tips to do this assignment. 

Hello Friends, 

Here is the solution of the assignment no. 1 of FIN 722. 

where is solution?

It was wrong solution someone forwarded me this is the reason I uploaded with excitement and found it was wrong so I deleted

 

PART =1
IRR =2.51

PART=2
NPV =1100000
PI = 2.22
PART=3
Payback period = 2.05 years

IS IT CORRECT PLZ TELL SOMEONE

bhi jan is ka farmula to send kara please

assignment ka solution to send kar da please

RSS

Latest Activity

Shine--Ex-VUStudent liked + "J ɨ y ą ⋆'s discussion meliiiiiiii dailyyyyyyyyyyyyyyyyy milkkkkkkkkkkkkkkkkk :(
4 minutes ago
+ Danial replied to Farhan Amin's discussion your vu email address will deleted
4 minutes ago
Shine--Ex-VUStudent liked +"Certified Gangster"++'s discussion New invention of Microsoft
5 minutes ago
Moji posted a discussion
11 minutes ago
+ "αяsαℓ " Ќąƶµяɨ •" replied to + M.Tariq Malik's discussion MGT211 GDB Fall 2019 Solution & Discussion in the group MGT211 Introduction To Business
16 minutes ago
Muhammad Usman Shahzad replied to + M.Tariq Malik's discussion CS601 Assignment No 01 Fall 2019 Solution & Discussion Due Date: 14-11-2019 in the group CS601 Data Communication
17 minutes ago
Muhammad Usman Shahzad joined + M.Tariq Malik's group
17 minutes ago
+ "αяsαℓ " Ќąƶµяɨ •" replied to sayyad saqib hussain shah's discussion HRM 626 HANDOUTS REQUIRED PLS
50 minutes ago
+ "αяsαℓ " Ќąƶµяɨ •" replied to Farhan Amin's discussion your vu email address will deleted
54 minutes ago
+ "αяsαℓ " Ќąƶµяɨ •" replied to + M.Tariq Malik's discussion MTH302 Business Mathematics & Statistics Assignment No 01 Fall 2019 Solution & Discussion in the group MTH302 Business Mathematics & Statistics
57 minutes ago
+ "αяsαℓ " Ќąƶµяɨ •" replied to + M.Tariq Malik's discussion MTH302 Business Mathematics & Statistics Assignment No 01 Fall 2019 Solution & Discussion in the group MTH302 Business Mathematics & Statistics
57 minutes ago
+ "αяsαℓ " Ќąƶµяɨ •" replied to + M.Tariq Malik's discussion MTH302 Business Mathematics & Statistics Assignment No 01 Fall 2019 Solution & Discussion in the group MTH302 Business Mathematics & Statistics
59 minutes ago
Farhan Amin posted a discussion
1 hour ago
Profile Icon+ "αяsαℓ " Ќąƶµяɨ •" and Purple Work joined + M.Tariq Malik's group
2 hours ago
Azhar Sagar liked Azhar Sagar's discussion quiz main kese 10/10 mark la saktay hain cheating ka asan tareeqa
3 hours ago
Azhar Sagar liked Azhar Sagar's discussion Subscribe my youtube channel for assignment solution and final year project help
3 hours ago
M IDREES replied to + M.Tariq Malik's discussion CS403 Assignment No 01 Fall 2019 Solution & Discussion Due Date: 13-11-2019 in the group CS403 Database Management Systems
3 hours ago
Azhar Sagar posted discussions
3 hours ago
M IDREES replied to + M.Tariq Malik's discussion CS403 Assignment No 01 Fall 2019 Solution & Discussion Due Date: 13-11-2019 in the group CS403 Database Management Systems
3 hours ago
M IDREES replied to + M.Tariq Malik's discussion CS403 Assignment No 01 Fall 2019 Solution & Discussion Due Date: 13-11-2019 in the group CS403 Database Management Systems
3 hours ago

© 2019   Created by + M.Tariq Malik.   Powered by

Promote Us  |  Report an Issue  |  Privacy Policy  |  Terms of Service