Finance and Accounting and Management Accounting

Project description

Compare and contrast the 4 main methods of investment appraisal that businesses use. The Word limit for this part is 2000 words.

50 Marks

Presentation including referencing using the Harvard style

10 Marks

**This following bit doesn’t have a word limit

The following forecasts are provided in respect of Redken Ltd, a company trading in a single product, for 2002:

Sales £2700

Purchases £1800

Cost of goods sold £1830

Average trade debtors outstanding £300

Average trade creditors outstanding £160

Average stocks held £305

All purchases and sales are made on credit, and trading transactions are expected to occur at an even rate throughout the year.

You are required to:

Calculate the operating cash cycle of Redken Ltd.

Explain to management what the operating cash cycle actually is, and why it is useful

Suggest how the operating cash cycle can be improved in this case.

Advise management as to what they could do to reduce their stockholding period.