Recommendation: Optimal Amount of Debt is 70% As Mr. Laporte approaches retirement‚ American Home Products (AHP) has an important decision to make with respect to adopting a more aggressive capital structure policy. Use of debt carries with it advantages and disadvantages. In accordance with value-based management‚ we recommend that AHP adopts a capital structure consisting of 70% debt. The following points justify such action: • The hallmark of value-based management is to choose strategies
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Jones Distribution Case Finance Team -13 Executive Summary: The Company Jones Electrical Distribution was founded in 1997. The company distributes and wholesales electrical components. It is a sole proprietorship owned by Nelson Jones who is looking for a new banking relationship that will allow him to receive a larger loan to sustain his business. Even though the company has been turning in profits‚ the ineffective collection practice‚ not availing trade discounts on time and ineffective
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Case Study: Baria Planning Solutions‚ Inc. Case Overview Baria Planning Solutions (BPS)‚ Inc. was founded in 1997 and is a publically traded firm with $95 million in annual sales. BPS helps its customers reduce procurement costs and improve the performance of their suppliers. BPS uses a combination of software‚ data analysis‚ project management and consulting to scrutinize its customers’ spending categories‚ identify sources of potential savings through initiatives such as supplier consolidation
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Reporting Income for Dot-Coms Priceline.com 1. Under the current system of accounting‚ the company would record revenues of $250 as they are the merchants to the transaction and $200 (80% of transaction value) as their cost of goods sold. 2. Alternatively‚ the company can net off the effect and show $50 (20% of transaction value) as their commission revenue. 3. If I were the CFO‚ I would recommend to opt for the first method of revenue recognition because it would show better
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Q3. What are the prospects for the industry going forward? 1.Though the average level of profitability in the pharmaceutical industry has been declining over time (In 2002‚ the average ROIC in the industry was 21.6%; by 2006‚ it had fallen to 14.5%)‚ historically‚ the pharmaceutical industry has been a profitable one. Because- Name of industry | Average ROIC(Between 2002 and 2006) | Pharmaceuticals | 16.45%(large) | computer hardware | 12.76% | Electronics | 3.88% | 2. The prospect
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situations‚ across domains and industries‚ using quantitative and/or qualitative analysis techniques. B. Instruction Methodology: Case Discussions. The students are advised to go through the specified cases along with the study material required for that case. C. Suggested Titles (Text and Reference): 1. Research Methodology (concepts & cases); Deepak Chawla & Neena Sondhi‚ Vikas Publishing (prescribed) 2. Business Research Methods: William G. Zikmund‚ Thomson South
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uncertainty and some facts which are not mentioned in the previous report. It is a trade-off the CEO need to thinker further and make a careful decision‚ especially when the evidence and the numbers are all provided by the company who want to sell its product. On the current analysis result‚ I will go forward with the project because of the good ROI and the good vista on taking this
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Q. What are the unique features of Shouldice’s services‚ as compared to that of a typical hospital? A. The hospital focused on this new procedure for treatment of external types of abdominal hernias. Some differentiating features of the Shouldice process were the arranging of abdominal muscles into three distinct layers‚ reinforcing the abdominal wall with six rows of sutures and did not involve any insertion of screen and mesh under the skin. Beyond the surgical procedure‚ it was the service
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Destin Brass Products Problem: - The Company is producing 3 major products – Valve‚ Pump and Flow Controller. The Company is concerned about the price cutting of Pumps going on in the market every month. It is also surprised to see no change in sales of Flow Controller despite 12 ½% increases in prices. Current Scenario: - Currently it is using traditional accounting system‚ Unit of product is charged for material cost‚ labor cost (standard time for labor times the labor pay rate $16 per hour)
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Aloha Airlines Flight 243 Boeing 737-200 April 28‚1988 Honolulu‚ HI Aloha 243 was a watershed accident : There were very clear precursors that were not acted upon It reflected a basic lack of airplane level awareness It pointed out errors in basic design and certification philosophies There were catastrophic unintended effects April 28‚ 1988‚ Flight 243 was scheduled for several “Island-hopping” flights: First Officer conducted preflight inspection in darkness and noted nothing unusual Airplane
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