6/14/2003 Chapter 11 Mini Case Situation Shrieves Casting Company is considering adding a new line to its product mix‚ and the capital budgeting analysis is being conducted by Sidney Johnson‚ a recently graduated MBA. The production line would be set up in unused space in Shrieves ’ main plant. The machinery’s invoice price would be approximately $200‚000; another $10‚000 in shipping charges would be required; and it would cost an additional $30‚000 to install the equipment. The machinery has
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discussion time during the meeting. The five projects are Gopher Place‚ Whalen Court‚ The Barn‚ Goldie’s Square and Stadium Remodel. Gopher Place was a request for $23.0 million to build a PO4 store scheduled to open in October 2007. The prototype NPV would be achieved with sales of 5.3% below the R&P forecast level. This market was considered very important with five existing
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discounting cash flows and the analysis of the NPV of both projects. An investment with a positive and high NPV is profitable investment and is more likely to me accepted by the company. A positive NPV means that the investment creates value and therefore the project generate enough cash flow to cover the cost and provide enough returns to the shareholders. In the case of a negative NPV‚ the investment should not be supported. Through a focus on NPV results of both projects we can conclude that the
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It is mentioned in the case that HPC only carries out financial evaluation after it has completed technical and strategic analysis. This seems to be an incorrect way to do it because you would expect financial to be priority or at least part of the initial analysis on a project. We also see here that they chose to use the payback period and ROIC in order to evaluate the project. A more accurate tool to use for this evaluation would have been either NPV or IRR. (If they are evaluating a
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ROE PNM used in its illustrative cost of service filed in Case No. 10-00086-UT. Mr. Monroy calculates a net present value cost savings of $20.9 million over the 20-year period of 2020 through 2039. Mr. Monroy selects this period because 2020 is the first full year following full AMI Projected implementation. Ms. Teague projects the O&M expense savings expected from AMI Project implementation. Ms. Teague provides reasonably detailed and thorough analyses for many of the expense categories in
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What type of investments would you value using Marriott’s WACC? The weighted average cost of capital measures the average risk inherent in the corporation and overall capital structure of the entire firm. Noting that low asset betas for less cyclical industries such as utilities and household products‚ versus the much higher asset betas of high-tech firms and luxury retailers‚ we can’t deal with the varied businesses in the same way when doing the valuation since that different lines of businesses
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Target Corporation Patrick Cunningham M03619570 Professor John Phelps‚ Ph.D. February 6‚ 2014 Executive Summary: This case study analyzed five different projects Target Corporation had to decide on capital spent for which project created the most value and the most growth for the company and its shareholders. By analyzing the financial statements and exhibits of each project‚ I was able to determine the positives and negatives of each of these alternatives. The alternatives were Gopher
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Auora Textile Company Case Study Industry Cheaper production costs Industry shift Consumer preferences Increased IT liability Auora Overview Established in early 1900s Hosiery Knitted Outerwear Wovens Industry Specialty Products 90% revenue in U.S. market Ratio Graphs Alternatives Problem: Should Aurora Textile Company install the Zinser 351 to replace its older-generation machine? The Zinser 351 Advantages: Produce a finer-quality yarn Increase efficiency Greater reliability Disadvantages:
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THE QUENCH CASE STUDY Contents 1. Executive summary----------------------------------------------------------------------2 2. Problem Identification and Analysis-------------------------------------------------2 3. Generation and Evaluation of Solutions---------------------------------------------3 3.1 Act immediately to cope with the negative publicity-----------------------------3 3.2 Produce environmental friendly package-----------------------------------------3 3.3 Emphasize the healthier
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which I used data‚ ideas‚ theories‚ or words‚ whether quoted directly or paraphrased. I further acknowledge that this written work has been prepared by me specifically for this course. Signed the student‚ 04/12/2007 EADS-AIRBUS (Case Study) [pic] EADS-AIRBUS Table of contents Executive Summary……………………………………………………………………..3 History of EADS ………………………………………………………………………4-5 Organization of EADS …………………………………………………………………. 6 Divisions of EADS ………………………………...…………………………………7-8 Strategy
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