Groupe Ariel SA Case Introduction Groupe Ariel SA of France is considering a project in Mexico. They need to analyze the net present value of the project‚ keeping in mind the exchange rates between Mexican Pesos and Euros in order to maximize their return. They also need to keep in mind the inflation rates over time and the risks involved with this type of investment. Analysis Number 1. Groupe Ariel is recycling old equipment in Mexico. They will need to use pesos to calculate their cash
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Groupe Ariel Sa Case Analysis Groupe Ariel S.A: Parity Conditions and Cross-Border Valuation Abstract This case discusses Cross-Border valuation of projects. This kind of analysis is common for companies that are operating in many countries. Groupe Ariel is one such company that is considering investing in a project in its own subsidiary in Mexico. The company manufactures and sells printers‚ copiers and other document production equipment in many countries. As far as‚ expansion into new markets
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4194 APRIL 19‚ 2010 TIMOTHY A. LUEHRMAN JAMES QUINN Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation On June 23‚ 2008‚ a Monday morning‚ Arnaud Martin arrived at his office in Groupe Ariel’s corporate headquarters in Mulhouse‚ France. The previous week‚ Martin had requested additional financial information about an investment proposal from Ariel-Mexico‚ a wholly owned subsidiary that operated a manufacturing facility and a regional sales office in Monterrey‚ Mexico. The information
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Program) Yan Guo (International Exchange Program) Zejian Yang (International Exchange Program) Groupe Ariel S.A. Abstract Groupe Ariel is a company that manufactures and sells printers‚ copiers and other document production equipment. The case focuses on an investment project in the company’s Mexican subsidiary that would expand operations into a new market‚ something it been slow to do in the past. Groupe Ariel believes its products have better durability for a lower after-sales service costs and markets
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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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Janice Miller American Intercontinental University Managerial Accounting 310 Instructor: Matt Keogh Introduction “Net Present Value (NPV) is the present value of the net cash inflows generated by a project including salvage value‚ if any‚ less the initial investment on the project‚” (Irfanullah‚ Jan.‚ 2013). It is preferred as one of the most reliable measures employed in capital budgeting since it accounts for the time value of money as it uses the discounted cash inflows. The net cash
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Case 3 Guilty as Charged [pic] 1. Perform a SWOT Analysis for Gilt Groupe. 2. Looking at your SWOT‚ what is the single greatest threat facing GG? How would you react to this challenge? What strategy would you follow or propose? 3. Looking at your SWOT‚ what is the single greatest opportunity facing GG? How would you go about taking advantage of this opportunity? What strategy would you follow or propose? 4. Five years from now‚ where do you see GG? A success? A failure
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1. What lessons did Maurice Levy learned from the failed FCB alliance? According to Maurice Levy‚ the most important thing he learnt from the failure of the alliance with FCB is the necessity to build an alliance not only based on a good relationship between the managers but also on a strong legal structure. In fact‚ the relationship Maurice created with FCB’s managers was mostly informal. Maurice and FCB’s CEO met only five times and the alliance was more a collaborative arrangement than a real
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Net Present Value and Internal Rate of Return by Harold Bierman‚ Jr Executive Summary • • • Net present value (NPV) and internal rate of return (IRR) are two very practical discounted cash flow (DCF) calculations used for making capital budgeting decisions. NPV and IRR lead to the same decisions with investments that are independent. With mutually exclusive investments‚ the NPV method is easier to use and more reliable. Introduction To this point neither of the two discounted cash flow procedures
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When cash inflows are even: NPV = R × 1 − (1 + i)-n − Initial Investment i In the above formula‚ R is the net cash inflow expected to be received each period; i is the required rate of return per period; n are the number of periods during which the project is expected to operate and generate cash inflows. When cash inflows are uneven: NPV = R1 + R2 + R3 + ... − Initial Investment (1 + i)1 (1 + i)2 (1 + i)3 Where‚ i is the target rate of return per period;
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