Hampton Machine Tool Company On September 14‚ 1979‚ Mr. Jerry Eckwood‚ vice president of the St. Louis National Bank was considering a loan request from a customer located in a nearby city. The company‚ Hampton Machine Too] Company‚ had requested renewal of an existing $1 million loan originally due to be repaid on September 30. In addition to the renewal of the existin- loan‚ Hampton was asking for an additional loan of $350‚000 for planned equipment purchases in October. Under the terms
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Hampton Machine Tool Company 1. Why can’t a profitable firm like Hampton repay its loan on time and why does it need more bank financing? What major developments between November 1978 and August 1979 contributed to this situation? A/ Hampton Machine Tool Company was unable to repay its loan on time due to several factors. One of such factors is the fact that the stock repurchase‚ for which the loan was initially requested‚ was a major cash disbursement of $3 million. In the period between November
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Executive Summary Hampton Machine Tool Company (HMTC) was founded in 1915 to produce machine tools. Machine tools manufacturing business is highly prone to economic fluctuations. Therefore‚ success of HMTC depends upon success of other related industries. The major customers of the company are aircraft manufacturers and automobile manufacturers. Sales of HTMC boomed during 1960s‚ decreased in the mid 70s and started to recover around 1978 due to the increase in demand of military aircrafts‚ a stable
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Entrepreneurial Finance Eric Wehrly Hampton Machine Tool Company The questions for the Hampton Machine Tool Company are given below. Please prepare for submission questions 1 and 2 only. That is‚ please submit your balance sheet for December 31‚ 1979 and income statement for the four month period‚ September through December 1979‚ requested in question 2 below (your income statement should not be monthly; it should cover the entire four months). Please also prepare‚ but do not submit‚ the
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Līga Brūmane Liene Ratniece-Miltiņa Sandeep Menon MIF 1st year Hampton machine tool company case study 1. Why can’t a profitable firm like Hampton repay its loan on time and why does it need more additional bank financing? What major developments between November 1978 and August 1979 contributed to this situation? (ST-1) Hampton has a substantial backlog of outstanding orders from respected customers so they need cash to purchase equipment to maintain production efficiency. In an effort to conserve
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FCF will grow permanently by 4% by year to the infinity‚ we can calculate FCFp as perpetuity: FCFp = FCF2004/(WACC-g) = 54288 So finally‚ we got NPV = 67855 and can calculate EV = NPV + WCR (1999) EV = 81275‚ which is the maximum price for the Hampton Tool‚ that Lycos should be willing
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TOPIC: MACHINE TOOLS India stands 13th in the production and 6th in the consumption of machine tools in the world. The country is set to become a key player in the global machine tools industry with substantial increase in manufacturing of high end machine tools. The Indian machine tool industry has approximately 1000 units in production of machine tools‚ accessories/attachments‚ sub-systems and parts. Threefourth of machine tool producers in India are ISO certified. The market for machine tools
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Financial Management Hampton Case Study Learning Objectives Understand the fundaments of financial forecasting Understand forecasting financial statements Practice evaluation of assumptions underlying forecasts Understanding ratios from lender’s perspective Understanding effect of stock repurchases Questions 1. Why can’t a profitable firm like Hampton repay its loan in a timely manner? 2. What major developments between November 1978 and August 1979 contributed to this situation
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1)Introduction A machine tool is a powered mechanical device‚ typically used to fabricate metal components of machines by machining‚ which is the selective removal of metal. Machine tools can be operated manually‚ or under automatic control. Early machines used flywheels to stabilize their motion and had complex systems of gears and levers to control the machine and the piece being worked on. Soon after World War II‚ the numerical control (NC) machine was developed. NC machines used a series
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CASE: MAKING NORWICH TOOLS LATHE INVESTMENT DECISIONS PAR T A: PAYBACK PERIOD years cash flows 0 1 2 3 4 5 (660‚000) 128‚000 182‚000 166‚000 168‚000 450‚000 PBPA LATHE A cumulative cash flows cash flows LATHE B cumulative cash flows 128‚000 310‚000 476‚000 644‚000 1‚094‚000 (360‚000) 88‚000 120‚000 96‚000 86‚000 207‚000 88‚000 208‚000 304‚000 390‚000 597‚000 4.04 PBPB 3.65 ACCEPTABILTY OF EACH PROJECT: Lathe A will be
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