provide a report which incorporates the following :
- Use the information provided below to produce a report for the Board of Directors of Artic PLC, analysing and commenting upon its financial performance, covering the following five key areas:
- i) Profitability
- ii) Liquidity
- iii) Efficiency
- iv) Investment
- v) Gearing
You should state any assumptions you make as part of your analysis and provide conclusions and recommendations, incorporating suggestions of areas requiring further investigation.
(Note: Case Study information is provided on pages 4,5 and 6 for the completion of the above task.)
The company is considering an expansion programme and investing in two new capital projects
at different manufacturing locations. The following information is to be used to for the report :
2) Evaluate the above two projects – D and E, using three key capital project appraisal models /
techniques. (You are required to show all calculations )
Evaluate critically each of the three capital evaluation models utilised above, and explain which project you would recommend, incorporating the reasons for your decision.
Identify what other factors should be considered before an investment decision is made
- Projects D and E are divisible ( ie. It is possible to undertake a fraction of a total project. )
Calculate : (1) The optimal investment policy.
(2) The resulting total NPV from your investment policy.
If projects D and E were indivisible projects, explain how this would affect your decision above.
- Discuss critically some of the main difficulties (practical and theoretical) encountered in appraising capital investment projects, and comment on ways of overcoming those difficulties
