Introduction: Sampa Video‚ Inc. was a local video rental store which maintained a large share of the movie rental market in Boston Massachusetts in the 90’s. The firm was looking to increase their base from those who visited the store to online ordering and delivery within the Boston area. They looked to increase their ability to grow by more than double the usual yearly growth rate for a five year span. By opening up the online and delivery service they hoped to increase their sales by 10% yearly
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Sampa Video‚ Inc. 1. What is the appropriate discount rate and the value of the project assuming the firm is going to fund it with all equity? “The discount rate of a project should be the expected return on a financial asset of comparable risk” To estimate Sampa Video’s cost of equity capital we used the CAPM model‚ in which rf refers to the risk free rate‚ to the market risk premium‚ and β to the company Beta (Table 1). Since the Beta of the company wasn’t known‚ we decided to use an
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Summary Financial Information FY 2000 in $ ’000s Sales 22500 EBITDA 2500 Depreciation 1100 Operating Profit 1400 Net Income 660 Terminal Value Growth 5.00% Initial outlay 1500 Additional Assumptions Risk free rate Proj. cost of debt Market Risk Premium Marginal Corporate Tax Rate Proj. Debt Beta Asset Beta for Kramer.com Expected Asset Return 5.00% 6.80% using CAPM 7.20% 40.00% 0.25 1.50 15.80% using CAPM Projections for Home Delivery Project 2002E 2003E 2004E 2005E 2006E Sales 1200 2400
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knew most of what there was to know about communications as far as I thought it could take me. However‚ from the information that has been passed on to the class‚ I have had my mind opened up to a wealth of knowledge that I was previously lacking. Video Production is an aspect to communications that will help to add to my portfolio and the skills and knowledge that I will be able to pull from in the future‚ making me a valuable and versatile asset to whatever company I am employed by. I understand
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Sampa Video Valuation Case Study Free Cash Flow Projection: Based on all the given information and assumptions‚ the free cash flow projection for the company could be calculated as the table shown below (Exhibit 1‚ in thousands of $). The formula used for the calculation from year 2002 to 2006 is: FCF = (EBIT+Depr-Tax) + CAPX + Δ NWC. Starting at year 2007‚ the expected cash flow will be a growing perpetuity at an increasing rate of g=5%. Thus the terminal value could be calculated by the formula
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Video Standards [pic] General Information on Video Standards There are three major video signal standards‚ i.e. PAL‚ NTSC‚ and SECAM‚ and several substandards such as M-PAL and N-PAL. NTSC is the TV standard in North America and Japan‚ SECAM is used in France and parts of Africa‚ PAL is used everywhere else. Standard VCRs can only play back videos recorded in your local TV standard. If Europeans want to watch US videos (or vice versa)‚ these videos must be converted first. It does
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Analysis 1. If the firm was entirely financed‚ we can consider its competitors‚ Kramer.com and Cityretrieve.com‚ as comparables. Through the CAPM formula‚ we can calculate appropriate discount rate as follows. rU=5.0%+1.50*7.2%=15.8% The annual projected free cash flows which are presented in the Exhibit 1 are $-112‚000; $6‚000; $151‚000; $314‚000; $495‚000 respectively for year from 2002 to 2006. After year 2006‚ the free cash flow would grow at 5%‚ so we can calculate the terminal value of the
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Case 1: Sampa Video Case FBE 432 - J. K. Dietrich January 29th‚ 2013 Meghan Ammon Christina Daniele Sarah Riley To: Sampa Video Executive Committee From: Team C Consultants– Meghan Ammon‚ Christina Daniele‚ Sarah Riley Date: January 29‚ 2013 Subject: Sampa Video Home Delivery Expansion Analysis Introduction Sampa Video’s expansion into home delivery represents a tremendous business opportunity for the firm. However‚ before you make the initial investment this coming January‚ it
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Journal #2 – Music Videos I watched my hour long of videos on daily motion. I watched music videos by August Alsina and Beyonce’s self-titled album Beyonce. August Alsina is a 21year old singer born and bred from the streets of New Orleans‚ Louisiana enters into the music industry two years ago. For those who don’t know who Beyonce is she is an American recording artist and actress. Born and raised in Houston‚ Texas. She performed in various singing and dancing competitions as a child‚ and rose
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VIDEO GAMES ADDICTION: POSITIVE AND NEGATIVE EFFECTS OF PLAYING VIDEO GAMES ON YOUTH AND CHILDREN Master’s (one year) thesis in Informatics (15 credits) Usman Ahmed Inam Ullah Spring 2013MAGI01 Title: Year: 2013 Author/s: Abstract: Mankind has developed a lot in the field of Information Technology (IT)‚ Computer Science and Media entertainment. Video games are also the most popular form of media entertainment and gaming environment. It has been popular long before the
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