Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thinking back to the organization you examined in the Week 6 Discussion, pinpoint at least one capital investment for which the organization will need to

Thinking back to the organization you examined in the Week 6 Discussion, pinpoint at least one capital investment for which the organization will need to secure financing in the coming fiscal year:

Post a summary of the value of a capital investment project for your selected organization using time value of money concepts. In your summary, do the following:

  • Identify at least one capital investment for which the organization will need to secure financing in the coming fiscal year and provide a brief description of the project (type of project, estimated costs and allocation of funds, etc.). Note: This could be based on an actual situation, or you may use your creativity to make a possible project for the organization.
  • Identify what questions you would have, as a manager, about the company's financial position before engaging in this type of investment.
  • Using the concept of time value of money as the basis for your explanation, propose why the capital investment would or would not be of value to the organization at this time. (Below is a copy of my previous discussion showing the organization that I selected)
image text in transcribed
Erica Allen RE: Discussion - Week 6 COLLAPSE A company may have an immediate financial need, such as purchasing more stock, for example. The company may need to purchase more stock if current supplies are insufficient to fulfill client demands. The necessity to pay staff is another example of an urgent yet temporary monetary need. It's important for businesses to have enough funds on hand to pay their employees on a regular basis (weekly or biweekly). The company's working capital should be around average. When a business has sufficient working capital, it can satisfy its immediate financial commitments and maintain normal operations until longer-term financing can be secured (Brigham 8: Houston, 2022). Inadequate working capital puts a company at danger of being unable to satisfy its financial commitments, while excess working capital may tie up resources that might be put to better use elsewhere. Organization's cash flow would be helped by cutting inventory. To put it another way, this would free up funds that might be utilized to take care of other, less long-term commitments (Enright, 2020). Rapidly recovering receivables is another way the company might strengthen its cash flow (Enright, 2020). Incentives for early payment or the use of a factoring business are two options for doing this. The non-profit Big Brothers Big Sisters is one that I am acquainted with (BBBS). They match disadvantaged kids up with adult volunteers who can help them out with mentoring relationships. I will give you two scenarios in which the company has immediate cash need. First, 3335 must maintain a reserve fund in order to pay for necessary background checks on prospective volunteers. They should also be prepared to pay any administrative expenses connected with matching mentors with mentees. Second, there are sometimes unforeseen costs for the organization, such as when a kid has to be paired with a mentor who lives outside of their normal location. Expenses like this often need an immediate influx of cash. lfeel that 3885 should have reasonable quantities of operating capital. They need to have enough cash on hand to handle unforeseen costs, but they also need to be able to reinvest part of their money towards longvterm development. One approach that BBBS might enhance its cash position to satisfy its short-term financial demands is by conducting more fundraising events. https://www.bbbs.org/ Brigham E. F., St Houston, J. F. (2022). Analysis of financial statements. In Fundamentals of financial management (16th ed., pp. 128-150). Cengage Learning. Enright, M. (2020). Analyzing the Factors That Affect Your Cash Flow. https://www.wolterskluwer.com/en/expert-insights/analyzingthe-factors-that-affect-your-cash-flow

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting A Contemporary Approach

Authors: David Haddock, John Price, Michael Farina

5th Edition

126078035X, 978-1260780352

More Books

Students also viewed these Accounting questions

Question

3. What values would you say are your core values?

Answered: 1 week ago