Managing Financial Principles and Techniques

Topics: Net present value, Financial ratios, Internal rate of return Pages: 7 (2175 words) Published: March 29, 2011
BTEC Level 7
Advanced Professional Diploma in Management Studies
Managing Financial Principles and Techniques

Prepared for:
McCain’s Board of Directors

By
Arslan Irshad Dar
Tooting and Broadway consults
12 June 2010

Table of Contents

Introduction....................................................................................................1 Merits of accounting rate of return..............................................................................................1.1 Demerits of accounting rate of return.........................................................................................1.2 Merits of Payback Period.............................................................................................................1.3 Demerits of Payback Period........................................................................................................1.4 Merits of Net Present Value .......................................................................................................1.5 Demerits of Net Present Value...................................................................................................1.6 Merits of Internal Rate of Return...............................................................................................1.7 Demerits of Internal Rate Of Return..........................................................................................1.8 Financial Ratio Analysis.........................................................................2 Profitability Ratio......................................................................................................................2.1 Liquidity and Efficiency Ratio...................................................................................................2.2 Gearing Ratio...........................................................................................................................2.3 Linear Relationship.....................................................................................3

Consultants Opinion.....................................................................................4 Source of Funding....................................................................................................................4.1 Conclusion................................................................................................................................4.2 Appendix B.........................................................................................................5 Appendix C.........................................................................................................6 Appendix D........................................................................................................7 Appendix E.........................................................................................................8 References.......................................................................................................9 Introduction

Investment is a key part of building your business. New assets such as machinery can boost productivity, cut costs and give you a competitive edge. Investments in product development, research and development, expertise and new markets can open up exciting growth opportunities. At the same time, you need to avoid overstretching limited financial resources or restricting your ability to pursue other options. Deciding where to focus your investment is an essential part of making the most of your potential. McCain foods are World’s largest producer of frozen chips. Their first processing factory was established in New Brunswick Canada in 1957 owned and managed by McCain family. As a major user of energy for its production process McCain is seeking to reduce its energy relicense government and develop their alternate energy source which is more cost effective and environment friendly. So, company is interested in developing a wind turbine system and a...
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