FINC421 – Case Study in Corporate Finance Case Report Diamond Chemicals plc. : The Merseyside Project Introduction The goal of this report is to analyze and evaluate the capital budgeting decision of Ms. Morris and suggestion to the senior management of Diamond Chemicals PLC if sufficient capital should be allocated for the proposed £12 million expenditure to modernize and rationalize the polypropylene production line at the Merseyside Plant. The project
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Subject- Corporate Finance Case- Beacon Lakes 1. Step back from the challenges faced by Armando Codina and analyze the Beacon Lakes project. Is it a good project? What are the strengths and weaknesses of the site and market? The Beacon Lakes project is ambitious and at the same time very realizable project designed by Armando Codina. Codina put much effort into this project and has spent about two years to get permissions to start building a warehouse and an office park in
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Capital Budgeting Case Su Guan Fin316 4:00 PM 11/13/2014 Directions: Answer questions 1 – 6 and turn in a hard copy of your answers at the beginning of class on Thursday November 13th. No late submissions will be accepted. You will need to use Excel or Google sheets for most of the analysis. Please type answers to the questions in this word document and attach each spreadsheet as exhibits at the back. I am trying to replicate an exam experience as much as possible so I will not be answering individual
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Chapter 1 Note: the summaries at the end of each chapter are good study tools. Corporations A corporation is a permanent entity‚ legally distinct from its owners‚ who are called shareholders or stockholders. A corporation confers limited liability to its owners: shareholders cannot be held personally responsible for the corporations’ debts; they only stand to lose their investment. To incorporate‚ you work with a lawyer to prepare articles of incorporation‚ which set out the purpose of the
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When low net present value (NPV) projects are nurtured "for strategic reasons‚" the strategic analysis overrides measures of financial value‚ and vice versa. Relevant Financial Theory The financial concepts most relevant to strategic planning are those dealing with firms’ capital investment decisions. To select the projects to be financed‚ we calculate net present value by subtracting project’s present value with required investments. Projects with positive or higher NPV should be preferred than
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ownership of the company – if I buy 50 percent of a company’s equity‚ I own 50 percent of the company. Assuming a company’s debt means that I promise to pay the company’s lenders the amount owed by the previous owner. The value of debt is easy to calculate: the market value of debt is equal to the book value of debt. (Unless the debt trades and thus has a real “market value.” This information‚ however‚ is hard to come by‚ so it is safe to use the book value.) Figuring out the market value of equity
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Assignment Cover Sheet RESULT STUDENT NAME PROGRAMME MODULE TITLE MODULE TUTOR MODULE CREDITS ASSIGNMENT TITLE HANDOUT DATE 15/11/2012 PENALTIES FOR LATE SUBMISSION Kostas Papanikos Master In Business Administration Managing accounting and Statistics Dr Kounis Leo 15 Assignment SUBMISSION DATE 15/12/2012 CONTRIBUTION TO OVERALL MODULE 50% Up to one week late: Pass maximum grade awarded. Over one week late: Fail grade awarded University of Wales 1 City Unity College YOU MUST
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Q1. Why is Amazon’s cash cycle so much shorter than that of competitor Barnes & Noble? How does this comparison affect financial management decisions of other retailers? The market value of Amazon is much higher than Barnes & Noble. They are also in better marketing position then Barnes and Noble. Barnes & Noble has been on the rocks for a long time and failed to make headway in international markets with their Nook ereaders. The best answer I can give is because Amazon is a much larger company
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payback period since it considers the time value of money‚ Tim should not ask the Board to use DPP as the deciding factor because it produces conflicting rankings. With the Discounted Payback Period‚ investments that have a Positive Net Present Value (NPV) over the longer term will be rejected because of the fact that we have to set an arbitrary cut-off point. Since we determine a cut-off point‚ we are ignoring the possibility of growing cash flows thereafter. Thus‚ we are ignoring cash flows that are
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CASE 1 - A CASE STUDY OF VICTORIA CHEMICALS Corporate Finance (FEG304) Table of Contents 1.0) Introduction This report contains two case studies in the discourse of Corporate Finance‚ more specifically capital investment strategy. The cases are applied on the fictional company Victoria Chemicals and are divided into (A): “The Merseyside Project and Victoria Chemicals” and (B): “The Merseyside and Rotterdam project”. The cases are picked from the book “Case Studies
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