Financial Securities in Capital Market †MyAssignmenthelp.com

Question: Discuss about the Financial Securities in Capital Market. Answer: Introduction: It is a case in which Mark and Paul, two marketing student has presented 2 investment proposal in front of the investors to analyze them and make an investment into them so that the worth of invested amount could be enhanced. In this report, for the assistance of the investors, both the projects have been analyzed so that the investors could take a better decision. First investment proposal is related to the restaurant proposals where the investors would invest into the restaurant to enhance the worth of the invested amount. Further, second investment proposal is related to buying some financial securities to enhance the worth of the invested amount (Lafond and Roychowdhury, 2008). In first investment, various figures and amount have been analyzed to identify the total return from the investment. More, it has been found that still, various techniques would be required for the investors to analyze the first investment proposal. In this report, budgeting techniques have been analyzed t o identify the performance of the investment proposal and the total return which would be got by the investors through this investment project. In second investment, various figures and amount have been analyzed to identify the total return from the investment. More, it has been found that still, various techniques would be required for the investors to analyze the first investment proposal. In this report, capital budgeting techniques have been analyzed to identify the performance of the investment proposal and the total return which would be got by the investors through this investment project. An investment opportunity is required for every individual and organization to manage the funds and enhance the worth of the funds through getting the return and profit. Investment opportunity could be got by every investor at any moment of the life. These opportunities could be anything such as investing into the new project, machineries, financial securities, capital market, security market, diversification of organization, new machineries etc. Investments are the main way to adopt the market changes and according to that, manage the invested amount. Investments have changing environment. It is not required that the investors always get the positive return from the market. Sometimes, due to various changes into the market and the economical changes, the investment changes could be enhanced or deducted (Horngren, 2009). Still, an investor always looks for the high return and the expectation to manage and enhance the worth of the invested amount. There are many ways to identify that whether the investment would offer high return or not. In this report, there are 2 investment proposals. In first investment, various figures and amount have been analyzed to identify the total return from the investment. More, it has been found that still, various techniques would be required for the investors to analyze the first investment proposal. In this report, budgeting techniques have been analyzed to identify the performance of the investment proposal and the total return which would be got by the investors through this investment project (Garrison, Noreen, Brewer and McGowan, 2010). In second investment, various figures and amount have been analyzed to identify the total return from the investment. More, it has been found that still, various techniques would be required for the investors to analyze the first investment proposal. In this report, capital budgeting techniques have been analyzed to identify the performance of the investment proposal and the total return which would be got by the investors through this investment project. Restaurant Investment opportunity: In first investment, various figures and amount have been analyzed to identify the total return from the investment. More, it has been found that still, various techniques would be required for the investors to analyze the first investment proposal. In this report, budgeting techniques have been analyzed to identify the performance of the investment proposal and the total return which would be got by the investors through this investment project. According to this case, the investors would have cash in hand worth of $ 80,000. The investors would be required to buy Machineries or equipment worth of $ 30,000, consequently there are many other types of machinery which is also required by the investor to buy for managing the restaurant and start the restaurant business (Deegan, 2013). Further, company would be required to buy furniture, vehicles, and utensils and more, meals and drinks would be required for the inventors to buy to offer the products and meal to the guest of the restaurant. According to the case, $ 10, 000 would be spent by the business to buy the meals in for a week. This process would be start from the 1st June of the business and would run, till the business run in the market. This amount would be paid back to the suppliers on 1st August. Further, $ 20, 000 would be spent by the business to buy the drinks in for a month. This process would be start from the 1st July of the business and would run, till the business run in the market (Brown, Beeke and Verhoeven, 2011). This amount would be paid back to the suppliers on 1st August. The amount of drinks would be paid back by the company according to the %. Such as in first month, 10% of the amount would be paid in the first month, in second month, 45% of the amount would be paid in the second month, in third month, 45% of the amount would be paid in the third month. Further, the labour of the company is total 6 in the number which are working for the 6 days in a week and the working hours of the company is 6 hours in a day. Rate of the labour is $ 23 per labour hour and the total week in a month is 4. Further, $ 10,000 would be withdrawn by the companys investors every month. The total overhead of the company is $5000 per month and the sales of the company would be 20000 meals in first month, 18000 meals in second month, 18000 meals in third month and 22000 in forth month. The Average selling price of the products is the $ 45 (Brewer et al, 2005). Sales budget is a financial statement report that express the user about various future prediction related to the products and services which would be sell by a company. Sales budgeting reports are prepared by the organizations to analyze the total unit which could be sold and the total income from sales (Needles, Powers and Crosson, 2013). This helps the business to make the next steps accordingly. According to this case, the sales of the company would be 20000 meals in first month, 18000 meals in second month, 18000 meals in third month and 22000 in forth month. The Average selling price of the products is the $ 45. Labour budget is a financial statement report that express the user about various future prediction related to the total working hour and rate per hour which would be paid by a company. Labour budgeting reports are prepared by the organizations to analyze the total labour hour which would be required for managing the business. This helps the business to make the next steps accordingly (Nobes and Parker, 2008). According to this case, the labour of the company is total 6 in the number which are working for the 6 days in a week and the working hours of the company is 6 hours in a day. Rate of the labour is $ 23 per labour hour and the total week in a month is 4 Cash budget is a financial statement report that express the user about various future prediction related to the cash outflow and cash inflow. Cash budgeting reports are prepared by the organizations to analyze the total outflow and inflow which could be got through total revenue and the expenses. This helps the business to make the next steps accordingly. According to this case, the cash inflow and outflow varies each year. There is no similarity in the cash flows of the company (Bierman, 2010). Thus according to this case, it has been found that the budgeting reports of the company would offer helps the business to make the next steps according to the cash budget, sales budget and labour budget of the company. Practical issues linked with investment: Various practical issues could be linked in this investment opportunity such as management of the amount, economical issues, internal issues and the external issues (Van der Stede, 2001). In second investment, various figures and amount have been analyzed to identify the total return from the investment. More, it has been found that still, various techniques would be required for the investors to analyze the first investment proposal. In this report, capital budgeting techniques have been analyzed to identify the performance of the investment proposal and the total return which would be got by the investors through this investment project (Radebaugh, Gray and Black, 2006). Initial Cost $ -3,90,000 Cash Inflows June $ 1,00,000 July $ 2,30,000 Aug $ 1,90,000 Sept $ 1,40,000 Comparison of investment opportunity: After evaluating both the investment, it has been found that both the business would offer high return to the investors now it depends over the investor to find a better plan according to their suitability as both the opportunities are different from each other. Conclusion: Thus, it could be said that investment plays a crucial role and is required for everyone to manage the funds and enhance the worth of the invested amount. References: Bierman, H., (2010).An introduction to accounting and managerial finance: a merger of equals. World Scientific. Brewer, P.C., Garrison, R.H. and Noreen, E.W., (2005).Introduction to managerial accounting. McGraw-Hill Irwin. Brown, P., Beekes, W. and Verhoeven, P., (2011). Corporate governance, accountin Deegan, C., (2013).Financial accounting theory. McGraw-Hill Education Australia. Garrison, R.H., Noreen, E.W., Brewer, P.C. and McGowan, A., (2010). Managerial accounting.Issues in Accounting Education,(25(4), pp.79(2-793. Horngren, C.T., (2009).Cost accounting: A managerial emphasis, 13/e. Pearson Education India. Lafond, R. and Roychowdhury, S., (2008). Managerial ownership and accounting conservatism.Journal of accounting research,46(1), pp.101-135. Needles, B., Powers, M. and Crosson, S., (2013).Financial and managerial accounting. Nelson Education. Nobes, C. and Parker, R.H., (2008).Comparative international accounting. Pearson Education. Radebaugh, L.H., Gray, S.J. and Black, E.L., (2006).International accounting and multinational enterprises. New York, NY: John Wiley Sons. Van der Stede, W.A., (2001. Measuring tight budgetary control.Management Accounting Research,1(2(1), pp.119-137.