Financial Managerial Accounting Education †Myassignmenthelp.Com

Question: Discuss About The Financial Managerial Accounting Education? Answer: Introduction: The given case study depict that two investment proposals have been offered by the Mark and Paul in front of the investor to invest into the proposals and enhance the worth of invested amount. In this paper, various methods and tools have been taken into consideration to analyze the best investment proposal of the company. Capital budgeting techniques have been used in this report to analyze the first investment proposal and budgeting techniques have been used in this report to analyze the second investment proposal offered by the Mark and Paul. According to this report, the main motto of this paper is to analyze the best investment proposal which would provide the investors more return and the proposal of the investment would be attractive for the investors (Bierman, 2010). Additionally, the scope and limitation of both the investment has been analyzed and it has been found that the scope of the proposal is high return and opportunities in the market whereas the limitations are mana ging the investment amount. Nature and scope of investment: Investments are crucial for every person to manage the invested amount and the return from that investment. Basically, individual saves the amount and invest it into the various business opportunities or in the market to enhance the worth of their money. In financial terms, individual buys the financial products and various other similar products to enhance the worth of their amount and enhance the return from those products. Basically the nature of investments is dynamic and viable and offers various scopes to the investors (Lafond and Roychowdhury, 2008). Both the given investment proposals are also dynamic in nature as the return is not similar in all the four months and offers various opportunities to the investors to enhance the worth and gain more return from the market. First Investment opportunity: First opportunities offered by the Mark and Paul depict that the investment could be done in restaurant. This investment would offer them various opportunities. For this option, investors are required to spend some money in buying the noncurrent assets which would be required to run the restaurant. This business proposal offers the different revenue and expenses style to the company. Following are the overview of the investment proposal which could be evaluated through budgeting technique to reach over a conclusion: The above details have been used to make the budgeting reports of the proposals (Radebaugh, Gray and Black, 2006). Sales budget: This budget report depicts the user about various predictions in concern of future about the products sales and services sales of business. Mainly, sales budgets are prepared by the firms to recognize the sum of selling unit and revenue of the business opportunity. So that strategy and policy of the business could be made accordingly. This case study depict about the total sales of the business which could be 20000, 18000, 18000 and 22000 units in Jun, July, Aug and Sept correspondingly of products (meals) and the drinks of the business units would be 60000, 54000, 54000 and 66000 units in Jun, July, Aug and Sept correspondingly. Thus restaurants total sales would be $12,60,000, $11,34,000, $11,34,000 and $13,86,000. Labor budget: This budget report depicts the user about various predictions in concern of future about the labour hour and labour cost of business. Mainly, labour budgets are prepared by the firms to recognize the sum of total hours and cost of the business in terms of labour. So that strategy and policy of the business could be made accordingly (Needles, Powers and Crosson, 2013). This case study depict that the total labour unit which would be required in the business are 432, 432, 432 and 432 in Jun, July, Aug and Sept. The labour per hour rate is $23. So the companys total labour cost will be $9936, $9936, $9936 and $9936 in Jun, July, Aug and Sept respectively. Cash budget: This budget report depicts the user about various predictions in concern of future about the cash inflow and outflow of business. Mainly, cash budgets are prepared by the firms to recognize the sum of total cash flow of the business. So that strategy and policy of the business could be made accordingly. this case study depict that the total cash inflow of this business opportunity could be $13,40,000, $21,98,064, 32,55,128 and $45,55,192 in Jun, July, Aug and Sept respectively. Same time, cash outflow of business opportunity will be $2,75,936, $76,936, $85,936 and $94,936 in Jun, July, Aug and Sept. so the total cash flow of business opportunity will be $10,64,064, $21,21,128, $31,69,192 and $44,60,256 in Jun, July, Aug and Sept correspondingly (Van der Stede, 2001). Overview and analysis of budgets: The above budgeting estimations and calculations depict that the investment opportunity offered by Mark and Paul of restaurant would offer high returns to the investors. The budget reports depict that the revenue, cash inflow etc of the company are quite higher than the expenses of the company. The budgeting of the company depict that the revenues are viable and the company is required to manage the expenses and revenue in current manner so that high profits could be made by the company. Further, all the budgets are connected to each other (Garrison et al, 2010). These budgets express the great performance of the restaurant investment proposal. Practical issues of investment: Through it has been found that the investment proposal is quite great in terms of profit but it has been found, that it is not easy for a restaurant to manage the expenses with this much high revenue. It has also been found that huge requirement of money is required by the company to invest into the restaurant. Second Investment opportunity: Second opportunities offered by the Mark and Paul depict that the investment could be done in new machineries. This investment would offer them various opportunities. For this option, investors are required to spend some money in buying the financial assets which would be required to enhance the worth of invested amount. This business proposal offers the different revenue in each month. Following are the overview of the investment proposal which could be evaluated through capital budgeting technique to reach over a conclusion: Initial Cost $ -3,90,000 Cash Inflows June $ 1,00,000 July $ 2,30,000 Aug $ 1,90,000 Sept $ 1,40,000 This case study depict that the capital budgeting techniques have been investigated over the above cash outflow and inflow. Net present value, Payback period and ARR techniques have been calculated (Brewer, Garrison and Noreen, 2005). All the three techniques depict about the different result which are total return of $ 95,402.72 according to NPV technique in 4 months, entire amount could be get back according to the payback period technique in 3.77 years by the company and the average return % of this investment proposal is 30.79% according to ARR technique. Thus it has been found that this investment would offer positive return to the customers. Comparison: Both investment opportunities offered by Mark and Paul has been analyzed to reach over a conclusion that which one is the best one to invest and enhance the worth of the amount. Through the calculations, it has been found that the investment in first proposal would be more profitable for the company as the profits are higher into that proposal through various issues are linked with it whereas the profits are lower into the second proposals and offer less return to the customers. Conclusion: Finally, through this study, it could be said that the both the opportunities are better but the first opportunity is best one as it offers huge return to the investors. Through the calculations, it has been found that the investment in first proposal would be more profitable for the company as the profits are higher into that proposal through various issues are linked with it whereas the profits are lower into the second proposals and offer less return to the customers. 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. 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. 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. 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.