Financial Analysis of amended Profit and Loss Accounts

The following tables show the appropriate NPV values of the proposed project assuming the discount rate is 15% as the literature states. Tables have also been included to represent discount rates of 10% if the project exceeds expectations or 30% if the project doesn’t meet forecast. The financial assessment method of NPV has been chosen as the primary assessment method as NPV includes all relevant cash flows irrespective of when they are expected to occur and takes into account date of flows with discount factors.

The discount factors take into account that a is worth less in a years time than its present value due to inflation so an investment to be worthwhile has to exceed inflation. NPV has a direct impact on the wealth of shareholders in the company and as a company’s main aim is to create wealth a positive NPV enhances a company’s wealth thus a negative NPV reduce company wealth. The NPV of the project shows positive figures for all the discount rates applied showing that even if the project doesn’t perform to expectations it will still produce a positive NPV even if 30% discount factors are used as a worst-case scenario.

Other Methods of Evaluating Project The pay back period or PP as it is often quoted could be used to show how long the project would take to payback the initial investment from the projects cash inflows. This could have been used only in the project to show how long the project would take to repay the initial investment in the vehicles. Payback period isn’t of any real benefit in this projects context, as PP doesn’t show profitability and only deals with cash flows until payback has been achieved.

PP also has no mechanism to deal with problems of risk or uncertainty relating to the project. Pay back as a method of analysing the project has been discounted because of its shortcomings in providing a complete analysis of the projects potential. Accounting Rate of Return or ARR method, which takes the average accounting profit that the investment will generate and expresses it as a percentage of the average investment over the life of the project.

This basically would show the percentage return of the capital at the end of the investment and ignore s cash flows. ARR is not really suitable to measure performance over the life of the project; it is cash flow rather than accounting profit that is important. Cash is the measure of economic wealth generated by an investment. This is particularly important with the TOSA Project, as cash is needed to buy the licence each year so cash flow is an important measurement when gauging the projects potential.

Internal Rate of Return or IRR have also been overlooked as an analysing method in assessment of the project as IRR doesn’t address the question of wealth generation although it would indicate the same signal as NPV as to whether a project should go ahead. IRR would also ignore the scale of investment made and assume that a high rate of return being preferable without taking into consideration cost of capital, which is an important investment decision in any project.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyhomeworkGeeks
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Business and administrative studies
Thank you for your hard work
Customer 452773, October 19th, 2023
Business and administrative studies
Customer 452773, February 23rd, 2023
Criminal Justice
The paper was not accused of plagiarism and was written very well. I will let you know the grade once it is graded. Thank you
Customer 452671, April 26th, 2021
Business and administrative studies
excellent paper
Customer 452773, March 3rd, 2023
excellent job
Customer 452773, August 12th, 2023
Leadership Studies
awesome work as always
Customer 452773, August 19th, 2023
ACC/543: Managerial Accounting & Legal Aspects Of Business
Customer 452773, January 10th, 2024
Customer 452773, January 25th, 2024
English 101
IThank you
Customer 452631, April 6th, 2021
English 101
great summery in terms of the time given. it lacks a bit of clarity but otherwise perfect.
Customer 452747, June 9th, 2021
Leadership Studies
excellent job
Customer 452773, August 26th, 2023
Human Resources Management (HRM)
Customer 452773, July 11th, 2023
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp