# Finance homwork | Business & Finance homework help

Q1

Don't use plagiarized sources. Get Your Custom Essay on
Finance homwork | Business & Finance homework help
Just from \$13/Page

XYZ Ltd. is an online book company. The table below summarises the past 2 years of financial statements of XYZ Ltd.

 Item Fiscal Year 2015 Fiscal Year 2014 Revenue £5,103,000 £4,510,000 COGS £3,533,000 £3,555,000 Inventory £1,310,000 £1,272,600 Accounts/receivable £98,100 £90,500 Accounts/payable £818,800 £745,100

Assume that all sales and purchases are made on credit. Amazon, the biggest competitor, presented a cash conversion cycle (CCC) of –73 days for the same fiscal year of 2015.

Required

• Calculate the CCC of XYZ.
• What is the interpretation of a negative CCC?
• What should XYZ Ltd. do to compete better with Amazon?

Q2

ABC Wines Company is considering the acquisition of a new irrigation system for its extensive vineyards. ABC Wines could either buy the system outright for £10 million or secure a finance lease requiring three annual payments in advance of £3.7 million. The leasing company is not the supplier or manufacturer of the equipment.

The new system is expected to give the following pre-tax net cash savings over the existing system in use:

 Year 1 £6 million 2 £5 million 3 £3 million

The system would require replacement in 3 years’ time and have no residual value. The outright purchase would be financed by a loan with an interest rate of 8%.

Assume that corporation tax is charged at 25% and is payable 1 year in arrears. Writing down allowances are available on the depreciation of the equipment. The company uses the reducing balance method for depreciation at 25%. Lease payments are allowable for tax in full.

The company has no gearing at present and a cost of capital of 13%.

Required

• Evaluate whether or not ABC Wines should install the new irrigation system and whether it should use the purchase or the lease option. (Tip: You should use NPV to perform the analysis, and you should take into consideration writing down allowances.)
• Explain the primary ways in which finance leases differ from operating leases.

Grab 16% Discount On This Paper
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

We value our clients. For this reason, we ensure that each paper is written carefully as per the instructions provided by the client. Our editing team also checks all the papers to ensure that they have been completed as per the expectations.

Over the years, MyEssay.Help has managed to secure the most qualified, reliable and experienced team of writers. The company has also ensured continued training and development of the team members to ensure that it keep up with the rising Academic Trends.

Affordable Prices

Our prices are fairly priced in such a way that ensures affordability. Additionally, you can get a free price quotation by clicking on the "Place Order" button.

On-Time delivery

We pay strict attention on deadlines. For this reason, we ensure that all papers are submitted earlier, even before the deadline indicated by the customer. For this reason, the client can go through the work and review everything.

100% Originality

At MyEssay.help, all papers are plagiarism-free as they are written from scratch. We have taken strict measures to ensure that there is no similarity on all papers and that citations are included as per the standards set.

Our support team is readily available to provide any guidance/help on our platform at any time of the day/night. Feel free to contact us via the Chat window or support email: support@myessay.help.

Try it now!

## Grab 16% Discount On This Paper

We'll send you the first draft for approval by at
Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Our Services

MyEssay.help has stood as the world’s leading custom essay writing services providers. Once you enter all the details in the order form under the place order button, the rest is up to us.

## Essay Writing Services

At MyEssay.help, we prioritize on all aspects that bring about a good grade such as impeccable grammar, proper structure, zero-plagiarism and conformance to guidelines. Our experienced team of writers will help you completed your essays and other assignments.