Pan Europa

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Case Study 1 – Pan Europa Foods S.A. 1. Pan Europa Foods S.A. needs to increase their market value. Rows 2, Net income, 3, Earnings per share, and 6, Shareholders equity (market value). Pan-Europa needs to evaluate the proposed projects and select a subset that best ties into the organizations goals and objectives. In order to accomplish this, upper management at Pan Europa must first develop a list of the company’s objectives which should be weighted according to their contribution in accomplishing the goals and objectives of the organization. Finally, Pan Europa must estimate the probable contribution of each of the proposed project outcomes to obtaining the goals and objectives. Pan Europa needs to rely on their project managers in order to successfully implement these projects and full support from top management is of essence. 2. Below are the projects ranked as per each discounted cash flow model: NPV (WACC) 47.97 11.99 9.00 8.95 5.21 1.16 0.99 0.28 -0.87 -1.92 NPV (ROR) 41.43 9.90 7.31 7.08 3.88 1.87 1.78 0.55 0.32 -0.13 Eq. Annuity 7.33 1.75 1.29 1.25 0.69 0.69 0.30 0.09 0.06 -0.02

Rank Project 1 2 3 4 5 6 7 8 9 10 11 7 8 9 4 10 2 3 5 1

Rank Project 1 2 3 4 5 6 7 8 9 10 11 7 9 8 4 2 10 3 5 1

Rank Project 1 2 3 4 5 6 7 8 9 10 11 7 9 8 4 10 2 3 5 1

The equivalent annuity method would be the most suited for this exercise due to the fact that the projects being compared have different life spans. The effluent project

could be evaluated considering its cost today vs. the cost in four years when its mandated. 3. This ranking is solely based on monetary factors and it’s not taking into consideration any nonfinancial factors. In addition, this ranking is not assessing any of the risk factors for each of the projects. A weighted scoring model should help assist in the project selection ensuring that projects that most closely align to the organizations goals and objectives are properly taken into consideration during decision making. 4. The...
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