| | Case #4 - Conch Republic Electronics | | | | | | | | | | | | | | | | Input Area: | | | | | | | | | | | | | | | | | | | | | | | | | | | Equipment | $15‚000‚000 | | | | | | | | Salvage value | $3‚000‚000 | | | | | | | | R&D | $750‚000 | sunk cost | | | | | | | Marketing study | $200‚000 | sunk cost | | | | | | | | | | | | | | | | | Year 1 | Year 2 | Year
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Mini-Case Study: Bethesda Mining Company Week 4 Application 2 Jo-Ann Savoie Walden University Finance: Fiscal Leadership in a Global Environment DDBA-8140-2 Dr. Guerman Kornilov March 24‚ 2011 The following Mini-Case on Bethesda Mining Company was taken from the text corporate finance (2010‚ P. 203-204). In order to determine if Bethesda Mine should open‚ a thorough analysis of the payback period‚ profitability index‚ average accounting
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of equity can be defined as the risk-weighted projected return required by investors‚ where the return is largely unknown. Therefore the cost of equity for the upcoming year can be inferred by using the Beta of equity in the CAPM formula. In the case we are given the Beta of equity for the corporation. Therefore to calculate the cost of equity we plug the Beta of equity into the CAPM formula. Through this calculation we conclude that the cost of equity is 11.23%. These are the results we obtain:
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emphasized on striving for wealth maximization of the share holders and calculated it in terms of CF‚ capital gains etc Positive NPV Concept: Japanies Governance was of the opinion that the motto is not solely wealth maximization of share holder so the capital budgeting criteria was different US governace always check feasibility of the projects in terms of positive NPV Principle-Agent Relationship There was no concept of principal agent relationship in Japan‚ as Japanies believe that even the
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Question 1 Issues Arising From Case The issues are the future viability of the plant for producing EPC and the long-term effects of not upgrading this production line. The additional upgrade will result in additional production‚ but as mentioned by the sales director if there is no demand for the increase in supply and Rotterdam plants excess will be added to the Mersey side quantities the plant upgrade could ultimately result in a dropping of prices to shift supply. The transport division is also
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Case Study on Apollo Tyres Ltd. Investment Decision Dilemma Submitted to : Submitted By : Dr. L Ramani Shahina Zia (14DM190) Shakti Mishra (14DM192) Srikanth Thakkolam (14DM219) Surabhi Kachhawah (14DM224) Vivek Sethia (14DM250) Yatin Gupta (14DM253) Question 1 Explain and evaluate the future implication of company’s capital budgeting decision. Sol. From the case study‚ we can calculate the cost of equity capital as under Ke = Rf +β (Rm – Rf) = 0.0853+0.928(0.05) = 13.17%
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understand/figure out due to improper use of English grammar.) Case Synopsis: Heinz Ruhnau‚ Lufthansa ’s CEO‚ needed to determine how to deal with the foreign ex change risk resulting from the purchase of 20 new aircraft. Due to Lufthansa ’s recent growth‚ it needed new aircraft. Its official policy was to have half Boeing and half Airbus aircraft‚ so it needed to purchase some aircraft from Boeing to offset its pending purchase of aircraft from Airbus. Ruhnau needed to determine how to deal with the massive
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Diamond Chemicals PLC (A): The Merseyside Project Late one afternoon in January 2001‚ Frank Greystock told Lucy Morris‚ “No one seems satisfied with the analysis so far‚ but the suggested changes could kill the project. If solid projects like this can’t swim past the corporate piranhas‚ the company will never modernize.” Morris was plant manager of Diamond Chemicals’ Merseyside Works in Liverpool‚ England. Her controller‚ Frank Greystock‚ was discussing a capital project that she wanted to propose
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The Portes Case Boston-based Portes‚ Inc. is a software company that has been in operations for 10 years in the United States. Its flagship product is systems recovery software (called RecoverTM) that enables firms to recover data from damaged hard drives. The product has to be customized to client needs and the value of each product unit is high. The firm was founded by its current CEO‚ Diane Mullins‚ who is a software expert with a entrepreneurial bent. She studied computer science as an
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calculate the cost of equity for these projects because of the information provided. The information provided is the beta‚ the risk-free rate‚ and market risk premium Which‚ if any‚ of the projects are unacceptable and why? Include on ONE graph the NPV profile for each project. Project D is unacceptable Rank the projects that are acceptable‚ according to your criterion of choice. According to my criterion I will rank the projects that are acceptable. As previously stated project D is unacceptable
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