Capital Management

Individual Case Study Assignment 3 Working capital management and capital budgeting Name Course Tutors Name Date Contents TOC o 1-3 h z u HYPERLINK l _Toc504383803 Individual Case Study Assignment Part A PAGEREF _Toc504383803 h 2 HYPERLINK l _Toc504383804 Net Present Value PAGEREF _Toc504383804 h 2 HYPERLINK l _Toc504383805 Internal Rate of Return PAGEREF _Toc504383805 h 3 HYPERLINK l _Toc504383806 Payback Period PAGEREF _Toc504383806 h 4 HYPERLINK l _Toc504383807 Other Considerations PAGEREF _Toc504383807 h 5 HYPERLINK l _Toc504383808 Individual Case Study Assignment Part B PAGEREF _Toc504383808 h 5 HYPERLINK l _Toc504383809 Approximate Equivalent Annual Percentage Cost of a 2 Discount Scheme PAGEREF _Toc504383809 h 5 HYPERLINK l _Toc504383810 Value of Trade Receivables under the Existing Scheme and the Proposed Scheme at the Year-End PAGEREF _Toc504383810 h 6 HYPERLINK l _Toc504383811 Benefits and Costs of the Discount Scheme PAGEREF _Toc504383811 h 6 HYPERLINK l _Toc504383812 Recommendations PAGEREF _Toc504383812 h 7 HYPERLINK l _Toc504383813 References PAGEREF _Toc504383813 h 8 Individual Case Study Assignment Part A Net Present Value Net present value method discounts cash flow into the expected value of money at the time the cash flows occur. Return on investment is calculated by comparing the time adjusted value of both cash