EPPM3644 KEWANGAN KORPORAT DAN PENSTRUKTURAN SET: 3 REPORT OF CASE STUDY: CASE 19 WORLDWIDE PAPER COMPANY PROFESSOR: DR. LIZA MARWATI BINTI MOHD YUSOFF GROUP MEMBERS: LOH CHAI LING A140178 GOH HOOI SAN A139708 KERK (KEH) YIH JEN A139574 SEMESTER 2‚ 2013/2014 INTRODUCTION In December 2006‚ Bob Prescott‚ the controller for the Blue Ridge Mill‚ was considering the addition of a new on-site longwood woodyard. Two primary benefits for this new addition include eliminating
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inventory levels‚ more accurate tracking of inventory‚ and space savings (Wikipedia‚ 2014). VIA Consulting is going to help CanGo to calculate the costs of the new ASRS system. Utilizing tools like net present value (NPV) and internal rate of return (IRR)‚ we will examine and evaluate if the investment will benefit economically the organization. The cost for a new ASRS system is approximately of $2‚000‚000
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INVESTMENT APPRAISAL One of the key areas of long-term decision-making that firms must tackle is that of investment - the need to commit funds by purchasing land‚ buildings‚ machinery and so on‚ in anticipation of being able to earn an income greater than the funds committed. In order to handle these decisions‚ firms have to make an assessment of the size of the outflows and inflows of funds‚ the lifespan of the investment‚ the degree of risk attached and the cost of obtaining funds. The main stages
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systematic relationship between different company related factors like age of a company‚ CEO education/qualification and the capital budgeting method adopted by it. Key Words: Capital Budgeting‚ Discounted Cash Flow‚ Non Discounted Cash Flow‚ NPV‚ IRR‚ Payback Period‚ ARR‚ Discount Rate‚ Cost of Capital‚ Risk INTRODUCTION Firms invest in long term assets in anticipation of an expected flow of benefits over the lifetime of the capital asset. It involves sacrifice of a certain amount of
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NEW HERITAGE DOLL COMPANY Capital Budgeting NEW HERITAGE DOLL COMPANY Capital Budgeting Brief Case Brief Case Brief Case Brief Case Brief Case Brief Case Brief Case Brief Case To: CFO (New Heritage Doll Company) From: Date: 11/16/12 RE: NEW HERITAGE DOLL COMPANY To: CFO (New Heritage Doll Company) From: Date: 11/16/12 RE: NEW HERITAGE DOLL COMPANY Here a composite report is advanced on the toy industry‚ New Heritage Doll Company and the evaluation of
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implementing both as both have a positive NPV. 3. Compute IRR and payback period for both projects. Based on each criterion‚ which project would you recommend? If this differs from NPV analysis‚ explain the deviation? For MMDC: IRR = 23‚99%* Payback period = 8 years (assuming the cash flows occur at year end‚ as instructed) For DYOD: IRR = 18‚33%* Payback period = 11 years (assuming the cash flows in 2021 is indeed CF2020*1‚03) *For the IRR analysis we drafted a NPV sensitivity graph in order to
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PROFESSIONAL PRACTICE (SPP) Effective 09 March 2011 _____________________________________________________________________________ The 2010 Standards of Professional Practice (SPP) for PH Registered and Licensed Architects (RLAs) is Part of the IRR of R.A. No. 9266 (The Architecture Act of 2004) and was Published 21 February 2011 in the Official Gazette (taking effect on 09 March 2011) 1 of 69 The Professional Regulatory Board of Architecture (PRBoA) URL/ website: www.architectureboard
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firm is considering two projects‚ and it requires a 12% return on its projects. Their minimum payback period is 2.5 years. Assuming the projects are independent (not mutually exclusive)‚ which would you choose based on the payback method? The NPV? The IRR? Project A Project B Initial outlay $200‚000 Initial outlay $180‚000 Cash flows Year 1 $70‚000 Year 1 $80‚000 Year 2 $80‚000 Year 2 $90‚000 Year 3 $90‚000 Year 3 $30‚000
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method to evaluate the projects. Because this method does not consider time period‚ WACC‚ Net present value and other factors. All the factors could affect the value of project. 2. To evaluate the investment projects‚ we can use 5 main methods‚ NPV‚ IRR‚ MIRR‚ payback and discount payback. Each method has different advantage to evaluate the investment projects. It is better to use NPV and MIRR methods to evaluate the projects. NPV can provide basic accurate methods to use time value of money to estimate
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bottom line c) What are the terminal cash flows? Depreciation amounts Salvage value + operating cash flow 2) Calculate the project’s NPV‚ IRR and Cash Payback. IRR= 61% NPV= $11‚051‚576 Cash Payback= 1.7011 3) Should the project be accepted? Defend your answer. Due to the fact that the NPV is positive at $11‚051‚576 and the IRR at 61% is higher than the cost of capital; the project should create revenue for the firm and therefore should be accepted. 8.) Explain why is interest
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