Sysmpson and Selph

Contents

Case 1: SIMPSON AND SELPH, LTD
1. Executive summary           P 2
2.   Problem/Decision Statement P 3 - 4
3.   Critical/Key Issues P 5 - 6
4. Strategic Analysis P 7 - 8
5. Quantitative analysis P 9 - 19
6.   Qualitative/Conclusion analysis P 20 - 21
Case 2: FLY-BY-NIGHT AIRLINES
7. Executive summary           P 22
8.   Problem/Decision Statement P 23
9.   Critical/Key Issues P 24 - 25
10. Strategic Analysis P 26 - 27
11. Quantitative analysis P 28 - 31
12.   Qualitative/Conclusion analysis P 32 - 33
13.   Bibliography               P 34

      Executive Summary

The author is charged with the responsibility of evaluating the best possible option of replacing the current carpet-binding machine for the company. The machine to be replaced was purchased five years ago and has depreciated for the past five years using the accelerated cost recovery schedule depreciation rate. The reason the management of Simpson and Selph wants to replace the machine is because it has been experiencing down time. The author will be evaluating if this machine can be still be in operation for the next five more years before it can be replaced as the vice operations president estimated that the machine can or if the machine be replaced with the same new brand or be replaced with a different new brand. Author will do his evaluations by computing the Net Present Value for each machine, the Internal Rate of Return, the Profitability Index and the payback period for each option to see which option will be the best to recommend to the company executive. All these three investment options will be evaluated over an equal five year investment life.

The best and most economic option that the author can recommend to Simpson and Selpf, LTD executive is to allow the current carpet-binding machine (Harley) to continue in operation for the next five year period and then only replace it after.... [continues]

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