Project Feasibilty and Npv
Principles of Managerial Finance
MBA6, GROUP 1
Phelps Toy Company
TOYS
Prepared by :Essam Gayad , Aladdin Al-Jajeh, Majed Mourtada , Shaza.Rifaai MHD Obada Morad
Date 22nd May 2012
MBA6 -MF
Phelps toy company case, 6 YEARS BUDGET STUDY, PROJECT FEASIBLITY Table (1) sales and net income of the company for the past years. year 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
$SALES
150,000 240,000 756,000 1,340,000 2,680,000 3,320,000 5,580,000 6,792,000 5,941,000 9,237,000 11,622,000 12,140,000 17,165,000 22,838,000 27,762,000 32,437,000 38,911,000 39,750,000 39,860,000
NET INCOME
(16,000) (5,000) 72,000 91,000 175,000 198,000 248,000 387,000 291,000 439,000 566,000 621,000 850,000 1,221,000 1,437,000 1,628,000 1,762,000 2,002,000 1,950,000
MBA6 -MF
FIG(1)
$
MBA6- MF
FIG(2)
$
MBA6- MF
The need to produce new products was becoming evident, as sales and net income were beginning to level off in the last two years, (1991 and 1992). The profitability ratio (net profit on sales) was decreasing a little bit from 5% to 4.8%. Phelps Toy Company had then to consider the advisability of adding a new product to its line. After doing market research and analysis of possible products, Mr. Barnes, who was in charge of new product development, decided that baseball cards market was a good choice for potential sales.
MBA6- MF
A baseball card is a type of trading card relating to baseball. A card features a baseball player. Cards are found in the US, Canada, Cuba, and Japan, where professional leagues are present with a substantial fan base to support them. Companies notable for making cards are Topps, Upper Deck, Fleer, Donruss, … Baseball cards can be highly collectible. Many antique stores contain a wide variety of baseball cards. Some baseball cards can be worth thousands of dollars.
MBA6- MF
However, In evaluating the market potential, Mr. Barnes determined that there was no way he could firmly predict the
MBA6, GROUP 1
Phelps Toy Company
TOYS
Prepared by :Essam Gayad , Aladdin Al-Jajeh, Majed Mourtada , Shaza.Rifaai MHD Obada Morad
Date 22nd May 2012
MBA6 -MF
Phelps toy company case, 6 YEARS BUDGET STUDY, PROJECT FEASIBLITY Table (1) sales and net income of the company for the past years. year 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
$SALES
150,000 240,000 756,000 1,340,000 2,680,000 3,320,000 5,580,000 6,792,000 5,941,000 9,237,000 11,622,000 12,140,000 17,165,000 22,838,000 27,762,000 32,437,000 38,911,000 39,750,000 39,860,000
NET INCOME
(16,000) (5,000) 72,000 91,000 175,000 198,000 248,000 387,000 291,000 439,000 566,000 621,000 850,000 1,221,000 1,437,000 1,628,000 1,762,000 2,002,000 1,950,000
MBA6 -MF
FIG(1)
$
MBA6- MF
FIG(2)
$
MBA6- MF
The need to produce new products was becoming evident, as sales and net income were beginning to level off in the last two years, (1991 and 1992). The profitability ratio (net profit on sales) was decreasing a little bit from 5% to 4.8%. Phelps Toy Company had then to consider the advisability of adding a new product to its line. After doing market research and analysis of possible products, Mr. Barnes, who was in charge of new product development, decided that baseball cards market was a good choice for potential sales.
MBA6- MF
A baseball card is a type of trading card relating to baseball. A card features a baseball player. Cards are found in the US, Canada, Cuba, and Japan, where professional leagues are present with a substantial fan base to support them. Companies notable for making cards are Topps, Upper Deck, Fleer, Donruss, … Baseball cards can be highly collectible. Many antique stores contain a wide variety of baseball cards. Some baseball cards can be worth thousands of dollars.
MBA6- MF
However, In evaluating the market potential, Mr. Barnes determined that there was no way he could firmly predict the