Case Study - Rumpole Ltd Essay Example | Topics and Well Written Essays - 2500 words

Case Study - Rumpole Ltd - Essay exerciseThe positive NPV indicates that the company forget generate sufficient cash inflows, which will coer the initial investment funds and generate profits for the company. The payback period is also estimated at 2 23/69 years. The come out has a positive NPV and the payback period appears to be reasonable (Kinney & Raiborn, 2008).On the basis of the project military rank with positive NPV and reasonable payback period, it could be recommended to the company that it should go with the project. Since, the company is currently considering only cardinal project therefore, it will be appropriate for the company to go ahead with the project. Otherwise, the company should consider sassy(prenominal) projects, which have higher positive NPV and short payback period (Maher et al., 2012).The financing required for the project requires perspicacity of different types of funding sources functional to the company. Since, Rumpole Ltd. is a private compa ny, therefore it will not be come-at-able for the company to acquire its funding from issuance of share capital or debt instrument in the secondary winding market. The company has two options from which it could raise capital for the net project. These include raising funds from internal paleness and / or external debt financing. Internal equity comprises of retained earnings of the company. These earnings are accumulated over the year and disclosed on the face of the companys balance sheet. These earnings are available to the company for investing into the companys existing operations or investing in the new project, which the company is considering at the moment (Brigham, 2013). Managing retained earnings require time. In short run, the company will have to manage its working capital. Active recoveries will work a lot. Aging of the receivables should be monitored actively. devotee levels of inventory should be lowered so that lesser amount is bound in stock. On the other hand, the company can also raise from external sources. The company can