Regarding
Various Scenarios for Adding a Karaoke Pub in the Sunny Beach Hotel .

Dear Sir,

I have considered the scenarios you suggested to be evaluated from economic point of view regarding the opportunity of accepting the offer of Planet Karaoke Pub to install one of its facilities inside the free space from 2nd floor of Sunny Beach Hotel or to extend the activities of our company with a Karaoke pub located on the beach area administrated by our own staff.

The pro- and contra arguments for the two scenarious, some of them already suggested by you, can be resumed as following:

A. Planet Karaoke Pub:

A1: Benefits and additional incomes for Sunny Beach Hotel.

- Additional cash-inflow of around 170000 bahts/month (equivalent to 4700 USD), respectively 2.040 millions baths/year (56666 USD/year). - The pub operator will have to pay a pro rata allocation of the utilization costs of 55000 baht/year (1530 USD) and maintenance costs of 10000 (280 USD) bahts/year. These costs will be claimed by the hotel to the pub operator and will not incurr aditional costs for SBH. - Increased number of patrons and visitors of the hotel due to new attraction, leading to an increased notoriety of our hotel.

A2: Costs and disadvantages for Sunny Beach Hotel

- It is necessary an investment for isolation of the area for the karaoke pub and for the kitchinette, evaluated between 770,000 baht (21400 USD) and 1,000,000 baht (27800 USD), all works on our expenses. - Disturbances of the hotel activity and possible claims due to noise and safety issues, with loss of hotel occupancy especially for family segment of our clients, ranging up to 25% of our clients and possible damages to the hotel prestige. - Reduction in available area for the future connection corridor to the new wing, from the existing free area of 3000 sq.ft (278 sq.m) to only 750 sq.ft (70 sq.m). - There will be additional costs for...

...
CorporateFinance Case Study:
Volkswagen
Volkswagen (VW)
Volkswagen (VW) is a German automobile manufacturer which was originally founded in 1937. Now VW Group is one of world’s leading automobile manufacturers and the largest carmaker in Europe, with its recent headquarter in Wolfsburg. VW is one of the ten brands under VW Group. (Volkswagen Homepage, 2011)
2011 VW’s revenue is 159,337 million EUR; net income is 15,409 million EUR, with a profit margin of 9.6707%. (Bloomberg, 2012) The increase from 2010 to 2011 is illustrated obviously in the following chart. (Bloomberg, 2012)
Income Statement for Volkswagen AG (VOW) 2010-2011, Bloomberg, 2012
Volkswagen stock (VOW: GR)
The current share price, close (Apr 13, 2012) is 119.3 EUR, its 52-week range is 82.350 - 138.800 EUR, and its 1-year return is 14.26%, as well as, market capitalization is 56,601.00 million EUR. (Bloomberg, 2012)
Interactive One-year Stock Chart for Volkswagen AG (VOW), Bloomberg, 2011-2012
VOW’s Earning Per Share (ttm) is 33.1 EUR, current P/E Ratio (ttm) is 3.5408, and Dividend Per Share (yield annualized) is 1.8771 EUR. (Bloomberg, 2012)
SWOT Analysis
In order to draw a conclusion for VW’s stock rating, SWOT analysis is conducted in this part.
Strengths
High product quality
Strong brand equity
VW group’s brand portfolio includes Audi, Bentley, Bugatti, Lamborghini, SEAT, 49.9% of Porsche, Giugiaro, Škoda marques and the truck...

...enticed to cut back on essential investments that are categorized as expenses, thus increasing current income in the short-term but consequentially leaving problems in the long run.
12. From the viewpoint of Stephens, what would be the worst feature of the long-term incentives? Explain.
Compensation via option relies on the absolute change in stock price, not the change relative to the market or to stock prices of other firms in the same industry. Due to this, Stephen will be exposed to the market and industry risks that are out of his control.
13. What specific source of funding would TRUST choose to use for the expansion project scheduled for next year? Assume TRUT’s financial position next year would be the same as of 31/12/13?
Assuming TRUST’s financial position will be the same as of 31/12/13, TRUST should choose to fund the expansion project using retained earnings as a source.
14. What should be the amount of the final dividend to be declared for financial year 2013? Explain.
Although management has the final say on what price they wish to set dividends, the final dividend in TRUST’s scenario must be equal to or be below the EPS of 27.6cents as dividends are paid out of earnings. Through a thorough analysis, the dividends may very well be set below that of the EPS in view of the earnings performance and capital requirements needed.
15. Calculate the alternative divisional WACC using the 3-step procedures in...

...corporation located in Seattle, Washington, and earns, $38,000 a year that she anticipates will grow at 3% per year. Natasha hopes to retire at age 65 and has just begun to think about the future.
Natasha has $75,000 that she recently inherited from her aunt. She invested this money in 10-year Treasury Bonds. She is considering whether she should further her education and would use her inheritance to pay for it.
The objective of this case is to show the options for Natasha, so she can make intelligent decisions whether she will remain in her current job, take certifications or MBA degree. This paper should be able to answer the following questions:
1. Determine the interest rate she is currently earning on her inheritance by going to Yahoo Finance;
2. Create a timeline in Excel for her current situation as well as the certification program and MBA degree;
3. Calculate the present value of the salary differential for completing the certification program;
4. Calculate the present value of the salary differential for completing
the MBA degree;
5) Based on your answers to Questions 3 and 4, what advice would you give to Natasha? Would your advice be different?
Answers:
1) Referring from Yahoo.com, the interest rate for June 1, 2009 is 3.71%.
2) Below is the timeline in Excel showing Natasha’s current situation as well as the certification program and MBA degree options:
Year
Current Job
Certification
MBA
1...

...
3210AFE
ADVANCE CORPORATEFINANCE
Financial Analysis Report
New Hope Coal Corporation
(4780 words)
STUDENT NAME: Member 1: S2704148 zhiqi Liu
Member 2: S2682143 Sai Tie
Member 3: S2730145 Lingfeng Zhan
Member 4: S2594576 Xindan Chen
Member 5: S2700906 Yinghui Huang
TABLES
Executive summary............................................................................................3
Introduction........................................................................................................6
Firm structure and corporate governance.......................................................6
Remuneration….................................................................................................8
Capital structure.................................................................................................9
CAPM BETA AND FACTOR MODEL ANALYSIS……………………….9
WACC Analysis..................................................................................................11
Firm Estimation by FCF and PE ratio.............................................................12
Growth project analysis.....................................................................................13
Mergers and Acquisitions Targets Analysis…………………………………16
Cost of Debt & Equity Funding........................................................................19
Risk...

...1.0 Introduction
The following report provides detailed analysis of the processes, risks, advantages and disadvantages of various finance methods available for Capital Incentive Projects. The focus is on initiatives undertaken within the Australian Construction Industry. Finance mechanisms including the choice between traditional corporate financing and project financing are examined, and compared in terms of adding value to Clean-O’s investment project. Projectfinance models including SPVs and additional resource facilitation methods such as Private Public partnerships (PPPs) are analysed from a lifecycle perspective, and in terms of their capacity to minimise risk and provide adequate returns on investment. Additionally, case studies are cited to draw attention to successful finance models with a focus to incorporate these structures at Clean-O Pty Ltd.
1.1 Overview
This paper outlines the potential benefits of undertaking a ProjectFinance Partnership (PFP) to construct a new water treatment facility. Risks discussed within this report are pertinent to this project and are of both internal and external nature and must therefore be analysed extensively. This analysis will allow for determining the likelihood of each risk occurring, and therefore allow Clean-O Pty Ltd to reflect these risks in the...

...1. In 2008, how many days on average did it take Bayside to sell its
inventory?
A. 126.1 days
B. 127.9 days
C. 153.8 days
D. 176.5 days
E. 178.9 days
Inventory turnover for 2008 = $4,060 $1,990 = 2.04; Days' sales in
inventory = 365 2.04 = 178.9 days
TEST MODEL : CHAPTER 3 CORPORATEFINANCE
Page 1
2. What is the debt-equity ratio for 2008?
A. 22.5%
B. 26.2%
C. 35.5%
D. 45.1%
E. 47.7%
Debt-equity ratio for 2008 = ($1,170 + $500) ($3,500 + $1,200) = .355
= 35.5%
3. What is the times interest earned ratio for 2008?
A. 30
B. 36
C. 40
D. 50
E. 54Times interest earned for 2008 = $1,200 $30 = 40
4. What is the equity multiplier for 2008?
A. 1.21
B. 1.36
C. 1.44
D. 1.82
E. 1.9
Equity multiplier for 2008 = $6,370 ($3,500 + $1,200) = 1.36
5. What is the return on equity for 2008?
A. 16.2%
B. 20.9%
C. 21.7%
D. 22.1%
E. 23.3%
Return on equity for 2008 = $760 ($3,500 + $1,200) = .162 = 16.2%
TEST MODEL : CHAPTER 3 CORPORATEFINANCE
Page 2
6. The Green Giant has a 5% profit margin and a 40% dividend payout
ratio. The total asset turnover is 1.40 and the equity multiplier is 1.50.
What is the sustainable rate of growth?
A. 6.30%
B. 6.53%
C. 6.72%
D. 6.80%
E. 6.83%
Return on equity = .05 1.40 1.50 = .105; Sustainable growth = {.105
(1 - .40)} {1 - [.105 (1 - .40)]} = .06724 = 6.72%
7. Lee Sun's has sales of $3,000, total assets of $2,500, and a profit
margin of 5%. The firm has a total debt ratio of 40%....

...Corporatefinance:
Corporatefinance is an area of finance dealing with the financial
decisions corporations make and the tools and analysis used to make
these decisions. The primary goal of corporatefinance is to maximize
corporate value while managing the firm's financial risks. Although it is in
principle different from managerial finance which studies the financial
decisions of all firms, rather than corporations alone, the main concepts
in the study of corporatefinance are applicable to the financial
problems of all kinds of firms.
The discipline can be divided into long-term and short-term decisions and
techniques. Capital investment decisions are long-term choices about
which projects receive investment, whether to finance that investment
with equity or debt, and when or whether to pay dividends to
shareholders. On the other hand, the short term decisions can be
grouped under the heading "Working capital management". This subject
deals with the short-term balance of current assets and current
liabilities; the focus here is on managing cash, inventories, and short-
term borrowing and lending (such as the terms on credit extended to
customers).
The terms Corporatefinance and...

...the payback period on each of the following projects?
Payback period: A 3 years, B 2 years, C 3years
b. Given that you wish to use the payback rule with a cutoff period of two years, which projects would you accept?
“B” Only B meetsthe given cutoff period.
c. If you use a cutoff period of three years, which projects would you accept?
“A, B, C” All the projects meet the given cutoff period, thus, every project (A, B, C) is acceptable.
(In terms of NPV, since B has the highest NPV, B is the best option.)
d. If the opportunity cost of capital is 10%, which projects have positive NPVs?
“B & C” have the positive NPV at the capital cost of 10%.
e.“If a firm uses a single cutoff period for all projects, it is likely to accept too many short- lived projects.” True or false?
“False” Assuming the definition of “short-lived projects” is “projects with short period of cash flow”, since the concept of payoff period doesn’t consider the cash flow after the payoff, the single cutoff period doesn’t block the long-lived projects (the projects generating long period of cash flow).
#4
You have the chance to participate in a project that produces the following cash flows:The internal rate of return is 13%. If the opportunity cost of capital is 10%, would you accept the offer?
Since...