Learning Goal: I’m working on a finance writing question and need an explanation

Learning Goal: I’m working on a finance writing question and need an explanation and answer to help me learn.Answer all questionsQuestion 1
a) Calculate the following ratios for Rio Tinto plc for the year ended 31st December
2019
Return On Capital Employed
Inventory Turnover (stock days)
Debtor ratio (debtors’ days)
Creditor ratio (creditor days)
Current ratio
Quick ratio
Debt/equity ratio
Interest cover
Return on Equity
Price Earnings Ratio (P/E Ratio)
Additional Information
Share price at close of business on 31st December 2019 = 4,503 pence
£/$ exchange rate @ 31st December 2019 = $1.326
b) Using the 2019 ratios you calculated in question 1 (part a) and the 2020 ratios calculated
in class write a brief report (500 words in total) which compares the performance of
Rio Tinto plc across both years.
Your marks for this question will not be affected by any errors you may make in the
calculations in question 1. If you have been unable to calculate any ratios in question
1 you can assume an answer for 2019 and write your report accordingly.
Question 2
Bonsall Plc are a manufacturing company who produce components for high performance
motorcycles. The product research team have been working on a new lightweight handlebar
which they are now proposing to launch. The production and sales teams have supplied the
following data to you- Bonsall’s Finance Manager.
Year Sales
£’s
Yr1 250,000
Yr2 305,000
Yr3 375,000
Yr4 475,000
Yr5 400,000
Yr6 0
A new machine will be required
immediately.
After 5 years the sales team forecast that the product will become obsolete and hence the
handlebar will be withdrawn from sale. At this point the original machine will be sold for an
expected scrap value of £5,000
Bonsall use a discount rate of 10% to appraise new investments. For an investment to be
authorized it must meet or exceed the following targets:
Fixed
costs
£’s
120,000
125,000
130,000
135,000
140,000
Variable Scrap
costs proceeds
£’s £’s
125,000
152,500
187,500
237,500
200,000
0 5000
0
to produce the handlebar at a cost of £150,000 payable
NPV- positive at 10% discount rate
IRR- 15%
Undiscounted Payback- 3yrs or less
Required
Using the information above for the new project calculate:
1) The undiscounted payback
2) The Net Present Value and
3) The Internal Rate of Return
Considering your answers state whether the project is acceptable.
Question 3
Discuss the benefits and drawbacks of raising funding using the following 3 sources of finance
1) Ordinary shares
2) Preference shares
3) Redeemable bonds
Your answer should consider issues of ownership, financial risk and cost.
Question:4
a) Discuss the merits and limitations of ratio analysis.
b) Explain your understanding of the risk/return relationship and why it is so important in
Financial Management.
c) What should be the primary objective of a commercial firm? How does this work in
reality and what other objectives might be important for the company?
Requirements: a) If assignment is Question & Answer based then. • Introduction is needed for each question. • Question has to be answered based on the mark allotted for each question with references if any idea or information is taken from other source. b) If assignmen