AIRTHREAD CASE Develop a projection of debt-free FCF for AirThread using the information provided in the case. Estimate a terminal value considering both the GG model and an exit EBITDA approach. Explain how you calculated g for the GGM. Also explain your final choice of terminal value. Develop a WACC for the acquisition. Assume an industry average D/E ratio. Do not use a private company discount as discussed on page 7. Calculate the value of Airthread operating assets based on the
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DATE: March 13‚ 2014 SUBJECT: Should Nucor Adopt the CSP Process? Cash Flow Analysis Cash flow analysis on Exhibit 1 represents net cash flow calculation using the base assumption. According to this calculation‚ Nucor would have net present value of $(11.99) million which is a negative value. This negative value on NPV indicates potential unprofitable consequences after implementing SMS’s compact strip production (CSP); therefore‚ Nucor should not invest in this new technology
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created. Also‚ if it is able to create a communication with dealers‚ it will effect to improve customer satisfaction and experience. Also‚ it helps to cut manufacturuing costs‚ which caused to compete effectively against competittor. Is the business case for the joint venture convincing? Back your answer up with a financial analysis Yes‚ it is. First‚ lets have a look at what was the situation for Fiat India before this JV. Some of their products failed to provide sufficient volumes
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a particular entity as a result of past transactions or events. Assets has three characteristics: it embodies a probable future benefit that involves a capacity or in combination with other assets‚ to contribute directly or indirectly to future net cash inflows‚ a particular entity can obtain the benefit and control others’ access to it and the transaction or other event giving rise to the entity’s right to or control of the benefit has already occurred. Future economic benefit is the essence of
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SOLUTIONS TO CASE STUDIES CHAPTER 13 Case Study 13.1 Telstra opts for David Thodey as replacement for Sol Trujillo 1. Why would the Telstra board appoint an internal candidate to the position of chief executive‚ rather than an external candidate? This question is a good opportunity for students to reflect on what constitutes ‘expertise’. On the surface of the facts‚ David Thodey may seem like an unusual choice given that his proposed management changes are
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qualified products that year (3.5 billion since 2000).3 The energy cost situation is one that the Tesca Works cannot ignore in their product development and marketing strategies. 2) Forecast the project’s cash flows for the next twenty years. What assumptions did you use? This project’s cash flows are projected over twenty years based on three assumptions or scenarios for the product’s demand: Weak‚ Average‚ and Strong. Each scenario’s variables are outlined in the Table 1 below: Table 1: Assumptions
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A09-05-0018 Eskandar Tooma Aliaa I. Bassiouny Valuation of an Increased Capacity Project Using Real Option Analysis: The Case of Savola Sime Egypt “Our profits almost doubled last financial year; however‚ I don’t think we can expect the same increase this year‚” said Karim Reda‚ production manager for Savola Sime Egypt‚ in September 1997. “We simply don’t have the capacity to produce more.” He was speaking to Mohamed Sallam‚ CFO of Savola. Over the past month‚ Sallam’s office had witnessed extensive
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you use to place a value on Hope? The merger should take place only if the expected market value of CHN and Hope combined exceeds the sum of their market values as individual entities. CHN can conduct the acquisition of Hope either through a cash purchase or through an exchange of stock. V (combined firm) = V (CHN) + V(Hope)+ V(additional value created by the merger) We think that it is
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MedImmune Case Study Background MedImmune is dedicated to helping patients live better lives through advances in science and medicine. Hundreds of thousands of patients have benefited from their products‚ which are designed to treat or prevent infectious diseases‚ cancer and inflammatory diseases (Wikipedia‚ 2012). Their extensive research and development efforts are focused on these same areas. MedImmune acquired FluMist when it purchased Aviron in 2002. FluMist is Aviron’s lead product for
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WAYSIDE INN INC CASE STUDY 2. Company Analysis Wayside Inns was formed in 1980 as the successor to United Motels Enterprises‚ a company that operated several franchised motels under licensing agreements from two national chains. Wayside has been experiencing brisk business and is currently operating at near full capacity. To capture more business Wayside is considering a 40-room expansion for the motel. We shall evaluate the company using a SWOT analysis. Threats - Competitors are expected
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