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ACCOUNTING AND FINANCE AAF044-6: Analysis on Capital investment technique of BHP Billiton Group
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Analysis on Capital investment technique of BHP Billiton Group
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ACCOUNTING ANDFINANCE AAF044-6
Main Assignment - Two
SAIMA SADIA SHEFA
STUDENT ID: 2016948
,Table of Contents
1.0 Introduction
2.0 Capital investment decisions techniques
2.1 Discounted cash flow techniques
2.1.1 PayBack Period
2.1.2 Accounting rate of return
2.2 Non-discounted cash flow techniques
2.2.1 Net Present Value
2..2.2 Internal rate of return
2.2.3 Profitability Index
2.2.4 Discounted Payback Period
3.0 Benefits of budgeting and planning in organizations
3.1 Advantages of Capital Budgeting
3.2 Limitations of Capital Budgeting
4.0 The Concept Of Corporate Governance
4.1 Role of Shareholders in Corporate Governance
4.2 Board of directors in Corporate Governance
4.2.1 Role of Board of directors .............................................................12
4.3 Comply & Explain ............................................................................13
5.0 Conclusion
6.0 References
1 | Accounting and Finance (AAF044-6) Main Assignment two
, 1. Introduction
BHP Group (formerly BHP Billiton) is the Australian public corporation
along with BHP Group Plc based in the UK, form the BHP Group. It is the
largest mining company in the world and Australia's most valuable
company for its market capitalization. BHP was incorporated in 1885,
while Billiton roots trace back to 1851. In 2001, Billiton merged with the
Broken Hill Proprietary Company (BHP) to form BHP Billiton.
Company core objectives are - creating sustainable value for its
shareholders, employees, contractors, suppliers, customers, business
partners and host communities.
The company produces Iron ore and nickel in Western Australia,
metallurgical (steel-making) and energy coal in Queensland and New
South Wales, and copper in South Australia. It also operates projects in
Canada, Chile, Peru, the United States, Colombia and Brazil to produces
copper, iron ore, coal and potash. Its petroleum business operates in Gulf
of Mexico, Australia and Trinidad & Tobago.
BHP is a multinational company with operations on six continents and
offices in more than 100 countries (Dick, 2007). Company’s Global
headquarters is in Melbourne, Australia and Corporate office based in
London, UK.
BHP Group is operating as a Dual Listed Company, with two parent
companies: BHP Group Limited, which is listed on the ASX and the New
York Stock Exchange (NYSE) under the symbol BHP, and BHP Group Plc,
which is listed on the London Stock Exchange and the Johannesburg Stock
Exchange under the symbol BHP and on the NYSE under the symbol BBL.
Company’s Financial Challenges
BHP operates globally and company's main mission is to create long-term
shareholder value for natural resources around the world. The company
has a track record of providing significant shareholder returns by heavily
investing in mining projects for a long time. Apart from serving the needs
of its customers and rising economies, the company is devoted to
protecting the communities in which it operates as well as the
environment (Thompson and Macklin 2009).
The company faces significant financial difficulties because of its recent
decision to postpone expansion plans for some of its key projects and had
to put billions of dollars on hold. The issue emerged after the company
joined its competitors in delaying expansion plans due to the global
financial crisis.
2 | Accounting and Finance (AAF044-6) Main Assignment two
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