Finance and Financial Management assignment Example | Topics and Well Written Essays - 1500 words

Finance and Financial Management - Assignment Example hat; organization is a place where in different departments work together in order to contribute in the long run productivity of the company as a whole (Lauby, 2005). Among number of departments work in an organization, the name of finance department is one of them, which has its own recognition and importance from the standpoint of a company as it deals with the management of the funds of the company as a whole. Among different functions and operations, usually initiated by the finance department, the name of capital budgeting is one of them. The main theme of this paper is to analyze the capital budgeting stance of the company, mentioned in the case study as a whole. There are total four questions that require being answered accordingly in this particular report. The essence of investment is extremely important from the viewpoint of an organization and there are number of methods from which an organization can analyze the stance of investment as well as appraisal in a perfect and efficient manner. Under the nose of Investment Appraisal, the name of methods like NPV, IRR, Payback and PI comes heavily and each and every method has its recognition and importance as far as analyzing the competitiveness is concerned. Mentioned below table is showing the cash flow which would have been generated by Bodmin Plc by considering the above cost benefit analysis. Net Present Value (NPV) is one of the most important methods, used for the purpose of Capital Budgeting (Lawrence J. Gitman, 2008). Net Present Value analyzes the future cash flow at the present time. The table of NPV is mentioned below, Internal Rate of Return (IRR) is yet another important methods that use in the process of capital budgeting. IRR is a point where in the future cash flow of a project or a company becomes zero (Bryman A, Bell E, 2007). Apart from the NPV, this particular method also used heavily by the companies and the analysis is mentioned below, A method that analyzes the efficiency of a