Here is the synopsis of our sample research paper on Financial Calculation Questions The 8 page paper is written in two parts.. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
The first part looks at an NPV calculation, extrapolates information from the case given, identifies errors, and then performs a new NPV calculation. The second part of the paper looks at a case provided where it is necessary to calculate the cost of capital, including assessing the cost of debt and equity and determining the cost of capital at a different debt to equity ratio. The bibliography cites 4 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEquestnpv.doc
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Unformatted sample text from the term paper:
and the information given each segment can be considered individually. However is should be remembered that when undertaking NPV calculation there are many potential discretionary variables. When undertaking a
net present value calculation there is a relativity simple process. The net cash flow, that is the cash flow created after costs have been deducted, for each year is discounted
to allow create a present value. The discount rate may be varied depending on the way that the calculation is to take place; a standard process is to use the
cost of capital for the firm, so that the cash flows are discounted to effective allow for the time value of money that is specific to that firm. As the
time value of money increases each year, the calculation will see each years cash flow separately. The total present value can then
be calculated by adding together the present value for each year, and then deduct the initial investment, so this is then the net present value (NPV) (Nellis and Parker, 2006).
The initial investment should not be discounted as it is already a present value, staring at the beginning of the project. If there is to be a salvage value at
the end of the project, this should be included as cash flow that is received in the last year, and discounted at the rate for the last year (Nellis and
Parker, 2006). When looking at the case we are told that a calculation had already taken place which resulted in a NPV
of $1.5 million. However, there appear to be some errors and some potential mistakes. The first issue is the discount rate used.
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