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Lyft Company 6

Lyft Company

Name

Institution

Calculation of the net present value

Year

Discounting factor 6%

Cash flow

Present value

1

0.94

-119.638

-112.46

2

0.89

663.999

590.96

3

0.83

-472.433

-392.12

4

0.79

-142.021

-112.20

5

0.64

-125.98

-80.63

NPV=-118.47

The net present value of the project is a negative value and therefore it means that the company is undergoing losses and therefore the organization should restructure itself to ensure that their operations are productive (Henao, 2017).

A five-year financial forecast for the company

2016

2017

2018

2019

2020

Total

Cash inflows

Investment activities

-407.853

-991.426

-1043.752

-1610.843

740.427

-3313.447

Operating activities

-1378.899

-105.702

-280.673

-393.526

-487.163

-2645.963

Financial activities

512.566

1574.196

852.238

2048.951

775.378

5763.329

Total inflows

-1274.186

477.068

-472.187

44.582

1028.642

-196.081

Cash outflows

Research and development expenses

64.704

136.646

300.836

1505.64

909.126

2916.952

Selling and administration expense

1362.458

2000.215

1251.609

788.461

594.306

5997.049

Other expenses

-97.88

-183.513

-338.402

-636.116

-453.963

-1709.874

Operating expenses

4173.063

6318.44

3134.327

1768.153

1035.901

16429.884

Total outflows

5502.345

8271.788

4348.37

3426.136

2085.37

23634.011

Net cash flow

-125.98

-142.021

-472.433

663.999

-119.638

-196.073

The data above shows how the Lyft Company is undergoing its business. It demonstrates the incomes that flows to the company and the expenditures during the normal operations of the company (Daryanto, 2019). This information is related to information in competency 1 since all are used to evaluate if the company is performing well and making profits. They are used to determine if the company’s going concern is questionable or not (Shokoohyar, 2020). According to the cash forecast above, the net cash flows of all the years have a negative value except that of the year 2019 where its incomes were more than the expenses. The negative values of the net cash flows implies that the company is bankrupt just as in the income statement where it net income was a loss (Sun, 2021). The company should therefore restructure its operations and engage in activities that will result to a profit (Hyun, 2021). Also, the company should employ those employees who are skilled and competent to ensure a quality production of goods and services. The company should therefore stop its operation until when it will get enough sources of finance to finance their daily operations.

References.

Daryanto, W. M., Dzikro, S. I., & Fitri, D. N. (2019). Financial Performance Analysis of Conventional Taxi in Indonesia: Before and After The Emergence of Ride-Hailing Company. South East Asia Journal of Contemporary Business, Economics and Law19(1), 13-21.

Hyun, K., Naz, F., Cronley, C., & Leat, S. (2021). User characteristics of shared-mobility: a comparative analysis of car-sharing and ride-hailing services. Transportation Planning and Technology, 1-12.

Henao, A. (2017). Impacts of Ridesourcing-Lyft and Uber-on Transportation Including VMT, Mode Replacement, Parking, and Travel Behavior. University of Colorado at Denver.

Shokoohyar, S., Sobhani, A., & Sobhani, A. (2020). Impacts of trip characteristics and weather condition on ride-sourcing network: Evidence from Uber and Lyft. Research in transportation economics80, 100820.

Sun, S., & Ertz, M. (2021). Dynamic evolution of ride-hailing platforms from a systemic perspective: Forecasting financial sustainability. Transportation Research Part C: Emerging Technologies125, 103003.

Net cash flow 2016 2017 2018 2019 2020 -125.98 -142.02099999999999 -472.43299999999999 663.99900000000002 -119.63800000000001 Column1 2016 2017 2018 2019 2020 Column2 2016 2017 2018 2019 2020

Lyft Company

1

Lyft Company

Name

Institution

Lyft Company 1

Lyft Company

Name

Institution