Preview

Assignment 4 AirThread Connections

Satisfactory Essays
Open Document
Open Document
277 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Assignment 4 AirThread Connections
F540
Assignment 4
Group Assignment

Airthread Connections

Prepare the Airthread Connections case using the following questions as a guide:

1. What methodological approach (APV, WACC, FTE, or some combination) should Ms. Zhang use to value Air Thread? Hint: It may be possible to use more than one techniques simultaneously.

The valuation of the Airthread Connections is conducted to assist American Cable Communication to decide if the acquisition of the Airthread Connections should be processed to achieve potential synergies.
We access the net value of the Airthread Connections by adjusting its present value (APV). We chose APV as our business valuation method because Airthread Connection’s financial information required by APV method is relatively sufficient and solid comparing with the information required by other valuation methods. We believe that the good quality of data can guarantee the reliability of our valuation.
Our valuation process includes the following six steps. 1. Decide the present value of unlevered free cash flows. 2. Evaluate the weighted average cost of capital. 3. Appraise the value of tax shields. 4. Access the terminal value. 5. Estimate the present value of non-operating assets. 6. Applying the illiquidity discount.

2. What discount rate should Ms. Zhang use for unlevered FCF for 2008-2012? Is this the same rate that should be used to calculate the TV? Why or why not?

3. Develop an estimate of the long-term steady-state growth rate for use in the TV calculation.

4. What is the total value of AirThread before considering any synergies? What is the value incorporating the synergies?

Prepare a brief (no more than 2 pages plus exhibits) memo for the CFO. You memo should be concise, well-integrated, and professionally written. Exhibits should be clearly marked, well-formatted, and easy to follow.

You May Also Find These Documents Helpful

  • Good Essays

    Write a 700- to 1,050-word executive memo as a team that includes a description of what you will look for to see if the client is consistent with the generally accepted accounting principles (GAAP). Pay particular attention to accounting treatment of share-based payment and accounting consolidation theory as it relates to special purpose entities. Keep the memo as brief as possible while fully exploring the issues.…

    • 498 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    (Using ABC to improve product pricing) Answer the four questions posed in the case. Include in your answer the basic differences between volume based (traditional) overhead application procedures and the ABC method.…

    • 399 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    4. Based on the data provided, estimate the sustainable growth rate for 1996 (i.e., the maximum growth rate that can be achieved with no additional equity financing), assuming the company maintains its debt/equity ratio, has no change in the ratio of sales to total assets, does not issue equity, and does not pay dividends. As you will recall from earlier finance courses, the formula is:…

    • 398 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    1) Prepare the manufacturing staff’s calculations for the three alternatives (please refer to the attachments):…

    • 1278 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    FASB Codificiation

    • 2321 Words
    • 10 Pages

    3. There are a multitude of steps that ABC Company must take as part of its valuation process in the firm’s preparation of its 2013 consolidated financial statements.…

    • 2321 Words
    • 10 Pages
    Powerful Essays
  • Satisfactory Essays

    boeing guideline

    • 305 Words
    • 2 Pages

    3) What would be the proper discount rate to use for the expected free cash flows from…

    • 305 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Once I finished reviewing the Accounting Memo sent to Andrew and team mates. I found several items that need to be changed in order to be re-directed to the Chief Financial Officer. This memo was written very informal since this was directed to a fellow team mate. All formal method of communication need to write out the entire word. In this case the word memo was abbreviated instead of writing out memorandum. There is no abbreviation and always use complete sentences. Rewording the memorandum and reorganizing the words will make a more complete and will cost no confusion to the reader. Example, for this memo, “We will have a meeting this Wednesday to discuss the Last In/First Out versus First In/First Out methods and the cost of goods. The Chief Financial Officer will need to present this information to the company’s president and board later this month.” Now the second paragraph could start by saying, “In order to continue reducing our federal and state taxes we recommend to continue with the use of LIFO. This way we can avoid getting to any inflationary economic issues. The abbreviations once again are used with P&L. The entire word Profit & Loss Statements needs to be written out to avoid confusion. The two bullet points are incorrect as noted. We could replace both bullet points by making to two complete sentences. Final paragraph has no relation to the entire memorandum. There is no need to talk about other companies that do not have any relation to our concerns. This memo was written without taking into consideration the audience. Memorandums weather informal or formal need to be written in a professional format. This is regardless who the audience might be. Many times memorandums are sending as a group message and this could include coworkers, upper level managers or even the CFO and the company’s president.…

    • 328 Words
    • 1 Page
    Satisfactory Essays
  • Good Essays

    5. Where will the value for the acquisition premium of 50% come from in the proposed buyout?…

    • 634 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Mt445 Unit 7 Assignment

    • 453 Words
    • 3 Pages

    iii. How does the average annual growth rate you calculated in (ii) above compare to the average growth rate the U.S. normally expects?…

    • 453 Words
    • 3 Pages
    Satisfactory Essays
  • Better Essays

    Noting the number of transactions (mergers, acquisitions, initial public offerings (IPOs), etc.), litigations (contractual disputes, bankruptcies, intellectual property right disputes, etc), and engagements (compliance-oriented – financial reporting, and planning-oriented – income tax) present in the business and accounting world, the need for business valuation has never been greater. Valuations of businesses, ownership interests, securities and intangible assets are needed for the business purposes outlined above.…

    • 1235 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    Radio One Case Study

    • 1155 Words
    • 5 Pages

    2, What price should Radio One offer based on a discounted cash flow analysis? Are the cash flow projections reasonable?…

    • 1155 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    Use the forecast data and a Terminal Value at year 5 to estimate the current valuation of your company. Comment on the quality of your forecast data and terminal value.…

    • 3525 Words
    • 15 Pages
    Powerful Essays
  • Good Essays

    Business Valuation

    • 763 Words
    • 4 Pages

    The present value and future value of the business are calculated. In order to come up with a proper future value, assumptions are made. Allowances for market changes are made. Business valuations may be done on a regular basis, say every year.…

    • 763 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Write About Myself

    • 1607 Words
    • 7 Pages

    INTRODUCTION In this memorandum, I will discuss proper writing specifically for your memo-format assignments. I will address distinct components and styles of a memorandum. I also will make recommendations for using visual aids at the end of your document. MEMO FEATURES A memo typically has three or four components: introduction, body, recommendations and/or conclusion, and visual aids (if needed). These features help the writer to transition smoothly from one analysis point to the next. They also allow the reader to easily follow the writer’s train of thought and to jump to one specific section or discussion point with little or no difficulty. Introduction Business memo introductions usually start with a purpose statement related to the subject line. Very short memos generally do not require formal introductory and concluding paragraphs. However, most memos assigned in Accountancy classes will be at least one page long. Therefore, unless an instructor specifies otherwise, memos should include a brief introduction and conclusion. The type of assignment generally dictates the format of your memo’s introductory paragraph. For example, your introduction for a case analysis should include the following information: a statement of purpose, a list of actions you will take to accomplish your task, and a preview of the recommendations/suggestions provided later in the memo. You should not detail your specific recommendations in the introduction; instead, you should indicate that you will provide recommendations to help Manager X or XYZ Company handle some particular concern or…

    • 1607 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Mobile Number Portability

    • 2273 Words
    • 10 Pages

    3.3. Port-In: It is the process when a customer with his non-Aircel MSISDN moves in to Aircel…

    • 2273 Words
    • 10 Pages
    Powerful Essays