Finance

Corporate Finance Coursework

Table of Contents

Introduction2

Discussion2

Responsibility3

Capital Budgeting3

Appraisal Techniques4

Accounting Rate of Return4

Net Present Value Technique5

Investment Appraisal5

Strengths6

Weaknesses7

Methodology used by RCM transport8

Recommendations for Weaknesses9

Conclusion11

References12

Corporate Finance Coursework

Introduction

RMC logistics ltd has been considered as an active participant in the global market transportation for more than twenty years. RMC logistics ltd operates in logistics industry and provides the professional service of transportation along with specialized transportation services for various group ages in London, as well as in Spain and Portugal. The company was founded in the year 1989 and become the first private company. In year 1991 the company started the transportation of cargo in Italy and gradually gained the experience in order to obtain recognition in the market and became latterly world's leading transpiration company (www.mrclogistics.lv). Since the year 1996, the company has been providing the transportation services for its own usage for the certain period of time, the company has also invested in the project of information technology which will become very effective in the later time and it would prove to be helpful in making the investment in such project (Robert, 1995, p. 20).

Discussion

One of the aspects of financial management explains the relevance of adequate decision making and accurate allocation of funds in various projects necessary for the successful business operations that yields back desired returns on these investment projects over a given period of time. The investment can be simply defined as the expenditure in cash or equivalent for a given period of time in order to enjoy a cash flow for future time period. The capital budgeting process plays a vital role, as it requires financial manager to make necessary investment decisions and seek for the opportunities that contribute in firm's growth. There are many sophisticated approaches for analyzing the capital budgeting process and it is also suggested that there are certain risk associated to these processes (Arnold & Hatzopoulopus, 2000, p. 620). Every organization must create the actualization and corporate objectives in order to generate the maximization of profit through increase of sales, organization survival and attainment of greater market share in the market to fulfill the basic needs for organization's customers.

Responsibility

All the necessary activities pertaining to the investment decision and investment plans partly belong to the financial manager and top management of the company. Furthermore, Accountant is also held responsible for collecting the essential data and the various resources and analyzing the more appropriate techniques that would be presented to the decision maker, whose first most responsibility is to take better decision in favor of organization.

Capital Budgeting

The methods of appraisal and capital budgeting have gained a lot of attention from a longer time period, however there is certain risk associated with these decisions that may hinder in optimizing the available resources in order to raise the capital and result in increasing cost of capital and may erode the value of company (Sangster, 1993, p. 325). The significance of capital budgeting, and the use of the capital investment for making and developing the current appraising techniques can be estimated by ...