cost of capital by determining that General Foods Corporation return on equity was equal to 15.4% and by estimating its cost of debt to be approximately 6% based on industry norms. Given the firm’s current total equity of $611m and its total debt of $318m and a tax rate of 52% we found General Foods Corp. WACC to be 11.3%. In determining the base case scenario‚ we simply took into account the capital expenditure on new building and equipment costs‚ the initial investment in net working capital as well
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1 Question 1 (16 points) Carol Inc is considering the following three prices to charge customers for each of the candy packets they produce: i) $2.20 ii) $2.00 iii) $1.70 The relevant data for decision-making is below: Fixed Costs = $1200 Variable Costs = $0.50 per unit Calculate the following: a) The Breakeven Point for each price level b) Using price of $2.20 what would be the new breakeven point if (1) fixed costs decreased to $1000 all else remaining the same‚ (2) Variable costs increased to
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Part A - AIB January 2015 Course Assessment 1 Failsworth Feeds - Cash Budget for the year to 31st December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals Notes Output (total number of products) - - - - 3‚000 3‚300 3‚630 3‚993 4‚392 4‚832 5‚315 5‚846 34‚308 1 Weeks per month 4 4 5 4 4 5 4 4 5 4 4 5 52 CASH IN
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ASSIGNMENT QUESTIONS DRESSEN 1. what are the main issues of interest (themes) in the Dressen case? We are talking about the case of a company which is on sale and have to choose a quick sell to a Private Equity Fund or a little bit longer selling negotiations to a competitor. Inside this decision there’s also the issue of correct company evaluation and sustainability of Private equity leveraged buyot. The main issue on this side is: future growth will sustain this operation
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Pharmaceutical Industry The pharmaceutical industry includes companies that research‚ develop‚ market or distribute generic and branded drugs. The industry expanded during the 1980’s and drugs to treat heart disease and AIDS were prominent. Consumer demand for nutritional supplements and alternative medicine increased during the 1990’s with the Internet facilitating direct purchases of drugs. Advertising for direct consumption of pharmaceutical drugs became more prominent; pharmaceutical companies
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TUTORIAL WORKING CAPITAL MANGAMENT CHAPTER 14 & 15 1. Explain what is meant by the statement “The use long term debt as opposed to current liabilities subjects to the firm to a lower risk of illiquidity.” 2. Why does an increase in the ratio of current to total assets decrease both profits and risk as measured by net working capital? How do changes in the ratio of current liabilities to total assets affect profitability and risk? 3. What is the difference between the firm’s operating cycle and
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continuous losses in the first two months of the year. On one hand the fragmented carton industry is becoming highly competitive which has resulted in a price war and on the other hand the company is facing problems in handling inventory and working capital management. Some traditional segments of PCS has become highly competitive leading to low profit margins and ultimately PCS had to quit those segments to maintain its own profit margins. At the same time a market study led by PCS has shown that
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Financial Management at Bajaj Auto Bajaj Auto Limited is one of India ’s largest two-wheeler manufacturers. As the dominant player until the early 1990s‚ Bajaj ’s market share declined from 49.3% in 1994‚ to 38.9% in 1999 with the entry of major competitors like Hero Honda. Bajaj has initiated several measures to regain its market share and strengthen its competitive position. The case discusses the financial strategy pursued by Bajaj. Financial Management at Bajaj Auto We want to get back
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INTRODUCTION:- Name of the company:- Bhaskar Industries pvt ltd Title-study of inventory management of textile industry. Duration of project:-2 months. Location: - Mandideep‚ Bhopal (M.P) COMPANY PROFILE:- Bhaskar groups have many sectors working in the current scenario such as media‚ printing‚ textile‚ FMCG‚ oils and internet service provider. The Bhaskar group is mainly famous due to newspaper and printing business‚ they have extended them self into textile sector in year 1995 and have set
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1. Is Mercury a good target for AGI? Discuss strategic fit of brands‚ products‚ customers‚ and distribution. Identify specific sources of value. Discuss AGI’s strengths/weaknesses compared with other bidders. Mercury AGI Brands Acquire an iconoclastic nonconformist image that trying to exploit by adding a line of active casual footwear. Associated with a lifestyle that was prosperous‚ active and fashion-conscious. products Main on men’s athletic footwear‚ and cover the athletic and casual footwear
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