I need solution without excel. I need you to solve them
manually, I need to do them in MS WORD, so please don’t use
excel I need help in Finance. the case study started here that
Shiner Threads Limited (STL) is in the business of textile and is a
renowned supplier of toddler and teens outfits in the industry. The
company is equipped with hi-tech machinery and is recognized for
its unique designs. Due to its key investment in technology and
human capital, company’s financials of last five years depict a
continuous increasing trend in sales and profits at the rates of
30% and 35% respectively. Company’s management is now planning to
expand its business operations, for which, Research and Development
(R&D) department of STL has proposed following three Mutually
Exclusive projects based on their market surveys: (It is notable that feasibility report
of each project is based on the estimates of six years). The first project proposed by R&D
is to open company’s own Clothing Stores. Estimates presented in
the feasibility report tell that this project requires an
investment of Rs. 1,950,000. This will generate after tax cash
inflows of Rs. 400,000 each in the first and second years, Rs.
600,000 each in 3rd , 4th & 5th years while Rs. 900,000 in 6th
year. Other information which has been provided in the report is as
follow: The second project proposed by R&D
is to open Consultancy Centers. These centers will aim to provide
consultancy services to other factories of the industry and to its
buyers regarding their real- life problems of doing business. This
project requires an initial cost of Rs. 900,000 while it will
generate after tax cash inflows of Rs. 300,000 each in first five
years and Rs. 500,000 in 6th year. The required rate of return for
the project is 28%. However, the feasibility report for this
project is not very much comprehensive as it is providing
information only about capital budgeting measure of IRR which is
approximately 26.7%. The third project proposed by R&D
is to open Skill Development Cells. The aim of these development
cells will be to launch different professional training courses in
the market. The initial investment required for this project is Rs.
1,270,000. This project also requires net working capital of Rs.
180,000 at the start of the project which will be recovered at the
end of 6th year. After tax cash inflows estimated to be generated
from this project are as follows: It
can be observed that the feasibility report of is providing values against all capital budgeting
measures except IRR. So, you are required to determine the
approximate value of IRR to complete the report. (5 Marks) Although the information provided in feasibility report of is missing for most of the capital
budgeting measures, however, you are required to determine only the
values of NPV & Profitability Index (PI) for this project. (5
Marks) Determine the missing values of NPV and Payback period for to complete its feasibility report. (8
Marks) After finding out all the required values of each project, analyze
which of the projects should be selected by STL and why? (2
Marks)