Flash Memory
Flash Memory, Inc.
Investment in New Product Line
University of Waterloo Prepared for Jim Gray October 11, 2012
TO: FROM: DATE: SUBJECT: Introduction
The Board of Directors, Flash Memory Inc. The Finance Team October 11, 2012 Investment in New Product Line
Flash Memory Inc. (herein referred to as “Flash” or the “firm”) is in the critical stage of planning for future operations and expansion. Competitive pressure, rapid market growth, continuous technological developments and high rivalry in the industry have caused Flash to experience increasingly low profit margins and liquidity issues. Our team has analyzed the current situation of your firm and its projected financial position for the future years 2010-2012. We then incorporated an analysis of the potential, new investment opportunity and its effects on future financial position, in order to decide whether your firm should pursue this growth opportunity. Based on our analysis, we strongly recommend investing in the new product line due to its positive net present value. Furthermore, we believe that it will help you maintain your competitive advantage in this rapidly changing industry. The project will address your concerns regarding cash needs and competitive pressure, among others. Ultimately, we predict that investing in the new project should be a strategic priority, as it will allow your company to remain a strong competitor in the electronic memory industry. Company Background Flash Memory Inc. operates in the computer and electronic device memory market. Founded during a high tech boom, the company has historically experienced higher returns as a pioneer in the market. Flash specializes in designing and manufacturing solid state drives and memory modules. These products are then sold to original equipment manufacturers, distributors, and retailers to be used in the end products such as computers and other electronic devices. As a small firm competing for market share against industry giants
Investment in New Product Line
University of Waterloo Prepared for Jim Gray October 11, 2012
TO: FROM: DATE: SUBJECT: Introduction
The Board of Directors, Flash Memory Inc. The Finance Team October 11, 2012 Investment in New Product Line
Flash Memory Inc. (herein referred to as “Flash” or the “firm”) is in the critical stage of planning for future operations and expansion. Competitive pressure, rapid market growth, continuous technological developments and high rivalry in the industry have caused Flash to experience increasingly low profit margins and liquidity issues. Our team has analyzed the current situation of your firm and its projected financial position for the future years 2010-2012. We then incorporated an analysis of the potential, new investment opportunity and its effects on future financial position, in order to decide whether your firm should pursue this growth opportunity. Based on our analysis, we strongly recommend investing in the new product line due to its positive net present value. Furthermore, we believe that it will help you maintain your competitive advantage in this rapidly changing industry. The project will address your concerns regarding cash needs and competitive pressure, among others. Ultimately, we predict that investing in the new project should be a strategic priority, as it will allow your company to remain a strong competitor in the electronic memory industry. Company Background Flash Memory Inc. operates in the computer and electronic device memory market. Founded during a high tech boom, the company has historically experienced higher returns as a pioneer in the market. Flash specializes in designing and manufacturing solid state drives and memory modules. These products are then sold to original equipment manufacturers, distributors, and retailers to be used in the end products such as computers and other electronic devices. As a small firm competing for market share against industry giants