Fonderia di Torino‚ S. p. A In late 2000‚ Francesca Cerini‚ managing director of Fonderia di Torino‚ is contemplating purchasing a new automated molding machine. Fonderia di Torino is a company that specialized in the production of precision metal castings for use in products like automotive‚ aerospace‚ and construction equipment. The company‚ located in Italy‚ is known for the quality and craftsmanship of its work. Through this reputation‚ Fonderia di Torino has been able to secure deals with
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task. Further more Fonderia di Torino is running at 90% capacity the addition of an extra 30% capacity would currently go unused. 2) Worker’s Union: The current collective bargaining agreement between the worker’s union and management is prohibitive. Cost cutting in the form of human capital is not done easily and will pose a challenge‚ especially considering the Vulcan Mold-Maker only requires 2 employees instead of the current 24. 3) Economic Slowdown expected: The Fonderia is not running at
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standpoint by looking at the project ’s projected discounted cash flows‚ the calculated NPV of the project‚ the IRR and PI. Finally‚ the project ’s other qualitative advantages and disadvantages must also be considered before the project is accepted or rejected. Question 1: What is the basic nature of the problem in this case? Answer: The basic nature of the problem in this case is all about capital budgeting issue that was being faced by Fonderia di Torino S.p.A. in decided to have some resources
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Fonderia di Torino‚ S.p.A Midterm Individual Case Fonderia di Torino‚ S.p.A is a manufacturing company who produces metal castings using six semi-automated molding machines. However‚ they are currently considering purchasing a Vulcan Mold-Maker machine to replace the six machines currently in place. The firm needs to consider all costs in deciding whether to keep the current machines or purchase the Vulcan Mold-Maker. Buying the Vulcan machine will result in year 0 outflows of 1.01 million
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Fonderia di Torino‚ S.p.A Midterm Individual Case 1. What are the economic benefits of acquiring the Vulcan Mold-Maker machine? In other words‚ what is the project’s NPV? This includes calculating initial outflows‚ cash flows during the lifetime of the project and salvage value. In other words‚ if you buy the mold maker‚ you will sell the old machines – what do you net from this sale‚ and when will you net it? The benefits of acquiring the Vulcan Mold Maker are that it requires less labor
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Finance Case Study: Fonderia di Torino S.p.A. Case Overview: Company considering purchase of Vulcan Mold-Maker automated molding machine. Machine prepares sand molds into molten iron using iron castings‚ automates manual intensive process. Questions: 1. Assess the economic benefits of acquiring the Vulcan Mold-Maker machine. What is the initial outlay? What are the benefits over time? What is an appropriate discount rate? Does the net present value (NPV) warrant the investment in the
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Fonderia di Torino S.p.A. 1. Please assess the economic benefits of acquiring the Vulcan Mold-Maker machine. What is the initial outlay? What are the benefits over time? What is an appropriate discount rate? Does the net present value(NPV) warrant the investment in the machine? Initial Case Outlay Price of new machine (1‚010‚000) Current after-tax market value of old machine [130‚000+{(415‚807-130‚682) -130‚000}*0.43]= 196‚704 Net outlay for new machine -1‚010‚000+196‚704 = -813‚296 Appropriate
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MM 5007 FINANCIAL MANAGEMENT FONDERIA DI TORINO YP 52 A – Syndicate 2 Lupita Thanaya Putri – 29114322 Andika Fadhli – 29114358 Grace Alonia Sitepu – 29114403 Wildan Rachman – 29114416 Gwendy Dale Henry – 29114954 MASTER OF BUSINESS ADMINISTRATION SCHOOL OF BUSINESS AND MANAGEMENT INSTITUT TEKNOLOGI BANDUNG 2015 FONDERIA DI TORINO Case Background Fonderia di Torino specialized in tlie production of precision metal castings for use in automotive. aerospace. and constluction equipment. In
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BMGT440 - Midterm Individual Case Fonderia di Torino‚ S.p.A Question 1 There are many benefits of acquiring the Vulcan Mold-Maker. In terms of purely economic benefits‚ this machine is less labor intensive‚ requiring only one worker per shift whereas the old machines required 12 workers per shift and 3 workers for maintenance. The new machine also provides a higher depreciation tax shield and cost savings in other areas of the foundry. Other benefits include improvements in quality‚ lower
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Case Introduction Fonderia di Torino S.P.A‚ founded in 1912 by Benito Cerini‚ was a manufacturing company which produced metal castings using semi-automated molding machines. The company’s main line of business was the production of precision metal castings for use in automotive‚ aerospace‚ and construction equipment. The company excelled at this and was awarded because of the quality of its products. The mainly European customers of Fonderia di Torino were original-equipment manufacturers (OEM)
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