this case. The case also enables discussion on conflicts of interest and other ethical dilemmas that may arise in investment decisions. 2. Issues for Analysis : What changes‚ if any‚ should Lucy Morris ask Frank Greystock to make in his discounted cash flow (DCF) analysis? Why? What should Morris be prepared to say to the Transport Division‚ Director of Sales‚ her assistant palnt manager and the analyst from the Treasury Staff? How attractive is the Merseyside project? By what criteria? Should
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need to receive to make him indifferent between attending Wilton University and staying in his current position? (Hint: Find the after tax salary needed by using the formula for the present value of a growing annuity given to you in your “Discounted Cash Flow Valuation” handout on September 19. Then convert to a pretax salary.)
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$41.25 million if purchased outright. This purchase can be done using currently invested short-term marketable securities. Leasing is also an option with payments estimated at $12.75 million per year. After analyzing each scenario using the discounted cash flow method‚ the best option is to lease the equipment rather than purchase it. The net present value (NPV) for leasing the DAS is a negative ($28.10 million) and the NPV for the purchasing the DAS is a negative ($28.64 million). Our net advantage
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aspects of receiving shares or cash from both the perspective of P&G and Gillette shareholders. Receiving Shares: P & G Positive-don’t need to give away cash on hand‚ doesn’t affect working capital‚ lowers risk because Gillette shares risk Negative-since it’s not affecting working capital company value could be off‚ earnings per each share issue go down Gillette Positive-tax advantage‚ share risk/reward with P & G Negative-liability incurred Cash: P & G Positive- shares will
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SUGGESTED STUDY QUESTIONS CASE KOHLER CO. 1. What is the total enterprise value of Kohler Co. using a Discounted Cash Flow approach? What is the total enterprise value using a multiples (market value of comparable companies) approach? What is the value of a share held by a minority shareholder in Kohler Co. that is implied by your valuations? 2. What assumptions can you use to arrive approximately at the share price of $55‚400 that was estimated by Kohler Co.? Show how these assumptions impact
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NPV is short for Net Present Value and it makes difference between the present value and cost of a project. In addition‚ NPV takes into account all cash flows through out the whole life of the projects‚ as well as the time value of money. And it compares like with like as all inflows and outflows are discounted to today¡¯s date. Also‚ the cost of capital is very unlikely to be changed over a period of time. To judge if the NPV is good‚ we should see the value of it‚ and the rule is the high the better
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cases is to expose students to a wide range of capital budgeting issues: A case: go/no-go decision 1. The identification of relevant cash flows; in particular‚ the treatment of: a. sunk costs b. cash flows obtained by cannibalizing another activity within the firm c. exploitation of excess transportation capacity d. corporate overhead allocations e. cash flows of unrelated projects f. inflation. 2. The critical assessment of a capital-investment evaluation system. 3. The treatment of conflicts
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09/05/2012 22th of May: ICampus: download case study + 6 questions (9am to 6pm end) Doyen A015 to A023 : we have the locals: tell him what we want (we have to book the locals) Entrepreneurial finance Different case studies cover the four parts (follow the IPO of Facebook) Project assessment: some toughts on business plan case studies: the knots and cachet tehnologies Introduction All these elements fits together. Business plan has to be written. Not a real predictor for success. People:
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EBITDA during 1982-84 was not enough to cover 1 year of interest expenses. ROE was increasingly negative during 1982-84. Liquidity and cash balances deteriorated‚ primarily impacted by dismal profitability and increased cash conversion cycle (decreased efficiency) during 1981-83. The charts below show the evolution of cash balances‚ cash flow from operations‚ cash conversion cycle‚ total capital and leverage for the period 1980-1984. In summary‚ the analysis of financial ratios and trends for the
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period during 2000-2005 (note the project starts in 2000). Numbers used in the Appendix A and B are drawn directly from Case Exhibits 3-7. AAR will be calculated as indicated in Case Exhibit 2‚ and NPV and IRR calculations will be based on Discounted Cash Flows including Interest Payments (because in Exhibit 7‚ OL seems to include Interest in their calculations). Case Background The case describes how the OL management team was eager to expand the business beyond its Disneyland enterprise in Japan
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