Sheffield Aerospace Materials is a medium-sized firm based in the advanced manufacturing parkway just outside the city center. The firm’s managing director Richard Byrd has asked for your help in selecting the firm’s future strategy and direction.
After 5 years of research and development, the firm has 5 products they are investigating and will launch to the market.
Below is a full set of accounts for Sheffield Aerospace Materials for the year to 31st October listed as Appendix 1.
Mr. Byrd the managing director would like you to prepare a report which answers the following questions.
Explain the role and function of the Finance Director/Finance Manager providing a clear explanation of the role of Financial Accounting and Management Accounting.
Critically explain the meaning of ‘Risk and Return’ for Sheffield Aerospace Materials and the ‘Time Value of Money.
Calculate:
a. The contribution per unit
b. The break-even point and the margin of safety
c. The required number of units to hit target profit.
d. If the firm makes the target profit based on estimated sales and the additional information in appendix two produces a revised Statement of Financial Position.
Calculate the Payback Period and Net Present Value for the product.
Critically evaluate if the product is viable for Sheffield Aerospace Materials and evaluate the advantages and disadvantages of the two investment appraisal methods.
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