Pan Europa Case Study
Pan Europa’s Case Study
Question 1: Given the current climate of Pan Europa’s corporation, the company must seek out invest opportunities to grow the company’s capital and revenue. For the past three years the net income has been tracking at a $2M-$12M loss. Fiscally Pan Europa’s financial decline has been in large of failure to brand and invest in a competitive market. Pan Europa’s future of remaining a viable business depends of taking on strategic projects that would restore strength in the company and shareholders. While the company has a significant amount of ground to be gain in analyzing products for products in the marketshare the company must, develop avenues in which a price-war can be avoided. The company’s recent price war by one of its board members was an example of how volatile the Pan Europa’s market share is within the European countries. Nigel Humbolt proposal to acquire leading schnapps brand and associated facilities allows for diversity in the core business and expansion in the market place. Pan
Europa’s would be able to reach new consumers and provide growth to the company. Nigel’s initial investment is under the boards limit capital spending investment of $80M, the projected return on investment is projected to be $134M yielding IRR of 28.7%. This is a substantial revenue gain for the company and would restore confidence in shareholders.
Question 2: In analyzing the NPV projects proposed by each board member, it would be most prudent for Pan Europa to invest in Nigel Humbolt plan to acquire leading Schnapps brand and associated facilities. The acquisition will revive Pan Europa organization. Utilizing the equivalent annuity, you will see the trend of the large investment for the first and second year, however; there is an increase in the level of annual payment over 10 years that yields a NPV at a minimum ROR of $41M.
Rank
11
7
8
9
4
NPV Based on Exhibit 3
Strategic Acquisition
Eastwood Expansion
Southward Expansion
Snack Foods
Artificial
Question 1: Given the current climate of Pan Europa’s corporation, the company must seek out invest opportunities to grow the company’s capital and revenue. For the past three years the net income has been tracking at a $2M-$12M loss. Fiscally Pan Europa’s financial decline has been in large of failure to brand and invest in a competitive market. Pan Europa’s future of remaining a viable business depends of taking on strategic projects that would restore strength in the company and shareholders. While the company has a significant amount of ground to be gain in analyzing products for products in the marketshare the company must, develop avenues in which a price-war can be avoided. The company’s recent price war by one of its board members was an example of how volatile the Pan Europa’s market share is within the European countries. Nigel Humbolt proposal to acquire leading schnapps brand and associated facilities allows for diversity in the core business and expansion in the market place. Pan
Europa’s would be able to reach new consumers and provide growth to the company. Nigel’s initial investment is under the boards limit capital spending investment of $80M, the projected return on investment is projected to be $134M yielding IRR of 28.7%. This is a substantial revenue gain for the company and would restore confidence in shareholders.
Question 2: In analyzing the NPV projects proposed by each board member, it would be most prudent for Pan Europa to invest in Nigel Humbolt plan to acquire leading Schnapps brand and associated facilities. The acquisition will revive Pan Europa organization. Utilizing the equivalent annuity, you will see the trend of the large investment for the first and second year, however; there is an increase in the level of annual payment over 10 years that yields a NPV at a minimum ROR of $41M.
Rank
11
7
8
9
4
NPV Based on Exhibit 3
Strategic Acquisition
Eastwood Expansion
Southward Expansion
Snack Foods
Artificial