This coursework is a report which should be properly structured and include an introduction, body and a conclusion The following questions need to be discussed and answered.
A) From the following mutually exclusive scenarios comment upon each one’s sensitivity to share price. · Sales growth rate · Corporation tax rate changes · Profit margin remains the same.
(b) It has been argued that SVA is flawed in that there are too many steps in the model and too many variables attached to them. Analyse this statement and in doing so evaluate the need for each step in the model.
c) Analyse how genetic algorithms may improve managerial decision-making, highlighting both the benefits and weaknesses they possess.
The steps of the SVA: step 1. Calculate WACC 2. Calculate future sales 3. Calculate after tax cash inflow 4. Calculate incremental investment needs ( only for first 5 years) 5. Calculate cumulative PV ( PV of first five years) 6. Calculate residual value ( PV of year 6 to infinity) 7. Calculate business value ( add 5 + 6 all discounted) 8. Calculate share price.
Please note that i will upload a document in which i have already answered the parts but briefly it’s around 1000 words please use what i wrote in the report and add up on that, it needs to be included in the report.
For part A specifically it needs to be brief within the report with the results that i have included in the document which were obtained by me, it resulted in sales increase having the greatest impact on share price.
Please if you have any questions don’t hesitate to ask